Bunge says swine fever impact will be felt for several years

The head of agribusiness major Bunge said the impact on feed prices and the trade flows of meat and soybeans stemming from the current epidemic of African swine fever will likely be felt over several years, with the business benefitting from that opportunity.

Speaking at the 14th Annual Farm to Market Conference, Gregory Heckman, CEO of Bunge, said that the US-based agribusiness major would benefit from changing trade flows as the company only has 15% of its crush capacity in China.

Asked about the impact, Heckman said that any forecast had to take into account the loss in size of the pig herd, how long a vaccine would take to develop, how long it would take to rebuild the herd, and how much of that protein demand gets shifted from pigs to cattle and fish and in which region.

“But directionally we know it should be less beans more crush, that’s net positive for us. We think for it to be noticeable it is beyond 2019 and it is multi-year… and whichever species it is from cattle to aquaculture it is more feed and feed ingredients which net net is constructive to soymeal prices.”

“There is no doubt that margins are better in our crushing franchise than our in our distribution franchise. We would always rather crush a bean than move it,” he said.

China's Ministry of Agriculture and Rural Affairs (MARA) said Tuesday that pig herds in the country are 21% lower than this time last year, down 2% on the month, as the ongoing African swine fever epidemic deters breeding.