Page 73 - Pig production Romania

III. ASF scenario

III.1. General comments
Background:
The baseline results as presented above assume business as usual (BAU) and do not yet include the impact of the numerous outbreaks of
ASF around the world in 2018, of which the impacts now become more visible. The ASF outbreaks are expected to reduce global pig
meat output for 2019 and onward. Especially China, the largest producer, has been severely affected (reported August 2018). In the
meantime, the disease has also been detected in other countries in Asia and Europe. This section presents an assessment of the medium-
term impact of the ASF disease on global pork production and demand, as well as a potential market recovery pathway.
Methodology:
The modelling of this ASF scenario has involved two different tasks. First, in order to calculate the potential prices that could drive the market
after the ASF outbreak, an equilibrium displacement model (EDM) was developed. This model covers the global market for pig meat and
includes an explicit representation of broad regions like EU and East Asia . This model was fed with shocks on regionally differentiated
1
changes in supply and demand for pig meat due to the ASF outbreak . Second, a run of the AGMEMOD model using as scenario input the set
2
of World market prices that were calculated by means of the EDM was carried out. Note that in the scenario analysis presented below, it is
assumed that there is no change in the current ASF disease status in any of the analysed EU Member States.

1 The EDM model has been parameterized using information derived from large scale models such as AGLINK-COSIMO and AGMEMOD. The synthetic elasticity estimates used account
for an increasing responsiveness to prices over time, while short-run demands and supplies are rather inelastic.

2 The negative shocks to supply mainly take place in the East Asia region, with their magnitudes in 2019 being -5% (Q1), -5% (Q2), -25%(Q3), -30% (Q4) and -35% (2020), after
which a recovery process started. The shocks on supply and demand for the different countries/regions considered were based on expert information, with one of the experts having
made a recent visiting tour through the East-Asia region.

Meat production ASF National potential Regional potential Conclusions References Contact Annex 1 Annex 2 Annex 3 Annex 4 73