Impacts of Chinese African Swine Fever Losses and Rebuilding on the U.S. Agricultural Sector

Lesley Ahmed

No 333162, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: Outbreaks of African Swine Fever (ASF) in China reduced the Chinese hog herd by nearly 40 percent between 2018 and 2019 according to official Chinese estimates. Such precipitous declines in domestic stocks have increased China’s import demand for pork, which may in turn put upward demand pressure on the U.S. hog sector. At the same time, the lower hog inventories weaken Chinese demand for soymeal, a primary feed input produced from imported soybeans. This paper will explore the effects of ASF losses on Chinese, U.S. and global pork production and trade, as well as effects on meat substitutes, such as poultry and beef, and pig feed ingredients, mainly soybeans. We do this while incorporating the MFP payments and trade actions. Looking beyond 2020, the implications of Chinese herd rebuilding under different scenarios will be simulated, considering possible effects from industry consolidation and modernization. We use the GTAP-AGR general equilibrium model with data from the GTAP version 10.0 database to analyze the simulated effects on output, prices, trade, and farm income of the affected commodities, as well as substitution between livestock feed inputs. The GTAP-AGR model introduces agricultural specificity by introducing new behavioral relationships into the standard GTAP framework. GTAP-AGR focuses attention on the factor markets, modifying both the factor supply and derived demand equations. GTAP-AGR also modifies the specification of consumer demand, assuming separability of food from non-food commodities. Finally, GTAP-AGR introduce the important substitution possibilities amongst feedstuffs used in the livestock sector.

Keywords: Livestock; Production/Industries (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:333162

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