The Friday Report: May 10th, 2019

Pig “Ebola” Sends Shock Waves through Supply Chain

The first incidence of African swine fever in China occurred last August on a farm with less than 400 hogs on the outskirts of Shenyang.  Although emergency measures were implemented and the outbreak was pronounced to be “effectively controlled” by the government, the disease had already gone viral.  The equivalent of Swine Ebola, the disease had been dispersed hundreds of miles through animals, contaminated food and on dust and dirt found on truck tires and clothing.  The disease has been spread to Mongolia, Vietnam and Cambodia and impacted global meat markets.

The largest component of China’s consumer price basket, the price of pork influences that of other meat prices.  This is the most significant issue affecting the animal protein market this year and the impact may linger for years.  Experts anticipate that up to 30% of China’s hog herd maybe lost to the disease.  China is facing 21 percent increases already this year over 2018 and the need to import more pork, meat and poultry to satisfy consumer demand.

Tariffs on $200 Billion of Chinese Goods Set to Increase to 25%

Despite reports by the administration that trade talks with China were proceeding well, President Trump announced on Sunday that tariffs on $200 billion of Chinese goods would increase to 25 percent on Friday May 10th.

Negotiations have been unable to reconcile disagreements over intellectual property and forced technology transfers.  According to the Wall Street Journal, China has been considering cancelling this week’s trade talks in Washington DC.  The announcement seemed to indicate a major new escalation in tensions between the Chinese and American government.  For weeks, there had been talk openly about a potential resolution in the trade dispute.  Announcement of the new imposition of tariffs sent global financial markets into a tailspin.

In addition, President Trump indicated that he would identify an additional $325 billion of Chinese goods for imposition of 25% tariffs.  This would essentially include all products imported to the United States from China.

Impossible Burgers:  Are They Impossible to Find?

The latest craze is a plant-based burger made by Impossible Foods, so beefy in taste and texture that Burger King put it on their menu!  Burger King’s limited partnership with Impossible Foods would expand distribution nationwide by the end of the year.  Already sold in 7000 locations, the Burger King expansion may double distribution by the end of the year, just in time for the introduction into grocery stores.

Initially launched in 2016 through chef partnerships at notable restaurants, the plant-based burgers were introduced at Red Robin and White Castle restaurants.