COVID-19 and the inability to access to Chinese import permits are causing negative economic effects on the North American swine genetics industry
By Jackie Clark
Staff Writer
Farms.com
As China ramps up efforts to rebound from African swine fever (ASF), North American swine genetics exporters hope they will soon be allowed to ship pigs into the country. COVID-19 has added to the financial burden of shipping swine genetics, on top of trouble getting import permits in China.
In the three years prior to ASF hitting China’s pig herds, Canada was responsible for approximately a third of the breeding stock imported into China from around the world, Jim Long told Farms.com. He’s president and CEO of Genesus Inc., an independent producer of purebred swine, accounting for 80 per cent of purebred breeding stock in Canada.
“Then ASF hit and China didn’t import any pigs for about a year,” Long explained. “Last fall they started importing some breeding stock from different countries” like Denmark, France and the UK.
Chinese officials have not yet authorized import permits from the United States or Canada.
“If you go back historically, Canada and the U.S. would have been 50 to 70 per cent of all the imports to China,” Long said. “Both countries are out of the market currently.”
Specifically, Genesus provided 80 per cent of the Canadian swine genetics exports to China. “We had the bulk of the business,” Long said.
Swine genetics is a niche business.
“Our best year I think we sent four to five thousand pigs to China. Right now, large scale importations are going to be necessary over the next two to three years, from what I can see, to rebuild their herds because their genetics were mostly decimated from the disease,” Long explained.
“At Genesus, we have production in England, so we’re exporting from England to China,” he added. Industry experts “are saying the U.S. is going to open up in two to three months. … We’re optimistic that Canada will open up fairly soon.”
Orders from China are ready to be fulfilled, and the industry is just waiting on import permits from the Chinese government
“We’ve worked with international affairs and we worked with the embassy in Beijing to be in constant communication with Chinese officials … we’ve had good co-operation from the Canadian government, they’re working with us,” Long said.
There has been no official reason given for the delay in granting import permits to the United States and Canada.
“Nobody has officially said what the reason is. There’s speculation it’s got to do with the political issues,” said Long, referring to the trade tensions between China and Canada since the arrest of Meng Wanzhou, deputy chairwoman and CFO of Chinese telecom giant, Huawei.
The delay has resulted in economic consequences to the Canadian swine genetics industry. “We haven’t been able to fill orders. We have numerous orders to China,” Long said.
The current COVID-19 pandemic has added further challenges to the North American swine genetics industry.
Both the broader swine industry and “the world economy and trade have been disrupted,” Long said.
Genetics are mostly exported and imported using air travel.
“A lot of cargo flies by passenger plane,” but now there are very limited international passenger flights. “So, all that cargo that used to go around the world on passenger planes has to find another way,” Long explained.
“The demand for cargo planes is the greatest it’s ever been in the world. The price of flying cargo is impacted greatly. For example, prior to the coronavirus, it was about US$450,000 (C$631,640) for a 747 to come from China to Chicago and right now I understand they’re getting paid US$1.2 to $1.3 million (C$1.7 to 1.8 million) for the same flight,” he said.
“It’s been a real scramble for us to be able to align shipments.”
Part of the inflated cargo prices is due to the demand from North America to fly in personal protective equipment (PPE) from countries like China.
“We’re flying cargo into where they need to pull (PPE) back out of, but the planes don’t even want to stop and unload cargo, because if they load the PPE right away they don’t have to wait as long, they get more flights in,” Long explained.
Some passenger airlines are considering retrofitting passenger planes to carry cargo because the demand is so great, he said.
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