It's Barbecue Season!

and it just got more expensive, although the Fed will never mention this food item in its report on inflation in the US.
Last summer I mentioned in an Odds and Ends piece about a swine flu appearance in Shenyang, China. A small farm had some dead pigs. Before the knowledge of the cause, this highly, contagious disease spread throughout the region. It was not contained. It crossed borders into Mongolia, Vietnam and Cambodia, all pork producing and consuming nations. It was found out to be African swine fever. Its first appearance in China has caught the nation by surprise. China produces half the world's supply and the culling has just begun, but the repercussions could extend for some time.
Year of the Pig
is generally seen as a positive sign in the Chinese zodiac, but sadly, ironically, it will mean higher pork prices for everyone.
Did you notice the cost for your Easter ham? Like I said, the Fed will never address real inflationary costs like food or energy, but the price rose from last year's low, $3.8 per pound to $4.3 per pound. People, that does not sound like much, but by the time you pay at the check-out counter, it is serious dough.
It is getting worse...
China has culled what would be an entire year's production in the US. This action will cause China's pig production to fall by 20% which would be a 17-year low. By the way China is the world leader in production with 50% of global sales. So far, there is no danger of an Ebola type transference to humans, but...
No Bacon for You.
This kills Sundays breakfast. Pork prices have risen by 20% in Spain and 17% in Germany. Prices have risen in other EU nations as well as the US.
Bottom line: China will need to import more pork. This will supersede the trade talks. Tyson has benefitted. The price action of the stock hit a low at $50 along with the rest of the stock market in December 2018. Since that point, it has rise like a rocket to $75. It could approach its high of $82. If it retraces, it usually touches $62 which would be a good entry point.
One last tidbit. Pork is the largest component in China's consumer price basket. This disease will push China's inflationary numbers past 5%. To keep Chinese consumers happy, China will have to import more pork even if the trade talks end with no results. The rally in pork has spread to other meat prices and exports. Australian beef exports rose 67% in the first quarter to China. Brazil stated that they are exporting more to China too, but no numbers were released.
I'll miss my bacon and eggs, however when it is to hot to cook, nothing beats cold cereal and milk.