A new study says an African swine fever (ASF) outbreak in the U.S. could cost $50 billion. Keeping this deadly disease of pigs out of the country is critical, the costs associated with an ASF outbreak in the U.S. would be significant

A new study says an African swine fever (ASF) outbreak in the U.S. could cost $50 billion. Keeping this deadly disease of pigs out of the country is critical, the costs associated with an ASF outbreak in the U.S. would be significant.

The study, conducted by agricultural economists at Iowa State University, estimates that the economic impact of a hypothetical ASF outbreak could cost the swine industry as much as $50 billion over 10 years when factoring in the impact of the loss of pork export markets.

In the study, two scenarios were compared to a baseline scenario (where ASF does not exist) to estimate the impact of industry downsizing on the U.S. economy. In the two-year scenario, it assumes the U.S. gets the disease under control quickly and reenters the export market within two years. Meanwhile, the all-years scenario assumes the disease spreads to feral swine and the U.S. is unable to eliminate the disease over the 10-year projection period; and exports never resume.

According to a study summary, if ASF were identified in the U.S., export markets would immediately close to U.S. pork, including ASF-positive countries such as China and the Philippines, which prohibit the importation of pork from any country with the ASF virus. U.S. live hog prices would drop by 40% to 50% to sell the surplus of pork intended for export. The oversupply of pork in the domestic market would lead to price reductions of other proteins. Lower demand for grain would reduce feed prices, the report said.

In the all-years scenario, the study shows hog prices fall by about 47% in the first year of the outbreak; however, prices eventually stabilize, coming in 1.8% lower than the baseline by the end of the 10-year projection period because pork exports continue to remain at zero. In the two-year scenario, hog prices decline by 47% initially and then climb back to baseline levels as soon as pork exports start to recover.

In the all-years scenario, pork production declines by almost 30% even as margins return to baseline levels. The two-year scenario shows a very small contraction in the industry over the long term, given exports eventually return to normal levels, the report showed.