By Dominique Patton and Hallie Gu
BEIJING (Reuters) – One of China’s top animal feed producers said on Tuesday an affiliated firm has culled nearly 20,000 pigs due to a suspected case of African swine fever, according to a report by the China Securities Journal.
Beijing Dabeinong Technology Group Co Ltd reported the information to investors in an online platform on Tuesday, the state-owned journal said. The company could not be reached for comment by Reuters.
China has reported more than 30 separate outbreaks of the deadly disease in nine provinces and municipalities since the first case in early August and has slaughtered tens of thousands of animals.
(GRAPHIC: Swine fever in China – https://tmsnrt.rs/2PDt6Ud)
Dabeinong has expanded from feed production into pig farming in recent years, building large sow farms to supply the world’s top pork market. It was the 15th largest producer in China in 2017, according to China Swine Industry Association data.
Like many other companies, it has bought or invested in other pig farming firms in an attempt to grow more rapidly and fill a gap left by the exit of small farmers.
According to the Securities Journal report, it owns a 40 percent stake in two pig farming companies in northeast Liaoning province, including one in Beizhen city, under the administration of Jinzhou city, where the suspected case was found.
China’s agriculture ministry reported late on Monday a new outbreak of African swine fever on a farm with 19,938 pigs in Jinzhou city. It did not identify the farm, but said 221 pigs had died from the disease, and that local authorities had culled all animals according to regulations.
It was the largest farm yet to report a case of the highly contagious disease, which analysts said underscored the increasing severity of the outbreak.
“The recent outbreak for sure will have a negative impact on the corporate plus farmer model,” said Feng Yonghui, analyst at industry consultancy Soozhu.com, referring to corporates’ use of contract farmers and affiliated farms to boost their production.
“It is not the best model in the industry in terms of food security and biosecurity,” he added, with wholly owned farms typically better supervised and likely to have better measures to protect against the spread of disease.
Dabeinong produced 640,000 pigs for slaughter in 2017, according to its financial report. It did not disclose numbers for farms that are not majority owned by the company.
In August, it warned that a big portion of its newly expanded pig farming capacity was idle, increasing production costs and pushing the company into its first quarterly loss in years.
Dabeinong shares fell nearly 3 percent on Tuesday and are trading at their lowest levels in six years.
Shares at other major producers including Muyuan Foods and Wen’s Foodstuff Group Ltd were also down more than 2 percent.
Shares in Jiangxi Zhengbang Technology Co Ltd, China’s fourth-biggest pig producer, fell 8.5 percent. The company said in a statement its breeding farms were all operating normally and none had been affected by swine fever.
China also reported three new cases of the disease in Liaoning province on Tuesday, including two in Panjin city and one in Tieling city.
(Reporting by Dominique Patton and Hallie Gu; editing by Richard Pullin)
