Lysine export boom belies amino acid-soymeal substitution claims

Chinese officials claim that livestock producers are substituting amino acids for soybean meal in animal feed, reducing China's reliance on imported soybeans. A spike in China's exports of the main amino acid is inconsistent with these claims.

China has built massive amounts of processing capacity to produce lysine--the most common amino acid--from corn (the main raw material). China is now the world's dominant lysine producer and exporter. Yet a November 2023 report by China's Mysteel agricultural market site said production of lysine is less than half of China's production capacity. Mysteel said China's amino acid industry suffers from serious excess capacity.

At peak output in 2020 Mysteel reports that China used 11 million metric tons of corn to produce lysine and other feed additives. Since then production has slipped to 8 million metric tons in 2023 due to weak feed demand and high corn prices. This does not agree with proclamations from Chinese officials that amino acid is replacing soybean meal at a rapid clip.

Meanwhile, China's exports of lysine have boomed. Exports began to accelerate in 2016 when Chinese officials began giving subsidies for every ton of corn--the primary raw material for lysine--used by industrial processors to dispose of a massive stockpile of Chinese corn. China's lysine exports grew from 257,000 metric tons in 2014 to 405,000 mt in 2018 and 785,000 metric tons in 2020. The corn stockpile was finally depleted in 2020 and subsidies ended. That year officials first announced the plan to replace soybean meal with amino acids. Chinese corn prices also shot up 40 percent that year, increasing the cost of raw material. Nevertheless, lysine exports kept growing to reach 961,000 metric tons in 2023. U.S. lysine exports were only 87,000 metric tons that year.

Source: China and U.S. customs data.

China's exports have overwhelmed the global market for lysine. In 2012 China was one of 5 major lysine-exporting countries. By 2023 China was the dominant exporter as its overseas sales boomed over the decade that followed while sales by other major exporters--the United States, Indonesia, Brazil, and South Korea--shrank precipitously. 

Source: customs data

If Chinese livestock producers are eagerly using lysine to replace soybean meal, why are Chinese lysine exports booming? The claims of growing lysine use in China do not square with reports that the amino acids industry is suffering from serious excess capacity problems.

Anthrax cases reported to skeptical Chinese public

Chinese state media reported an anthrax outbreak that infected 5 workers on a beef cattle farm in Qiji Town in western Shandong Province. Authorities apparently waited until they could no longer cover up the outbreak before issuing a public report. Social media reveals skepticism about government reporting on disease outbreaks.

According to a report issued August 2 by China Central Television (and in English by China Daily), five workers on a beef farm in Shandong Province's Qiji Town had "mild" infections of anthrax on their skin and are being treated in isolation. The outbreak was in Yanggu County in western Shandong's Liaocheng City. Authorities said all animals on the infected farm have been culled and properly disposed, local farms have been quarantined, the local area has been sanitized, and testing has found no indication of disease in other people or animals. 

The report explained that anthrax is an acute zoonotic infectious disease caused by Bacillus anthracis. It is mainly prevalent in herbivorous animals such as cattle and sheep. Humans are usually infected through contact with sick animals or animal products, and often experience symptoms such as high fever, vomiting, and diarrhea.

An X post by anti-CCP news outlet Epoch Times showed a screen shot of an August 1 notice (a day before the official report) by a financial company in the county that warned against visiting Qiji Town or eating beef or mutton due to the anthrax infections on a farm there. The company claimed the notice was fake. The X post also quoted a denial of rumors of human deaths issued by the village committee of Qi'er village in Qiji Town. The village committee said cattle had become sick more than half a month earlier, but the animal carcasses had been burned or buried with no transmission to humans. 

According to the Epoch Times post, that same afternoon an employee of the local Chinese center for disease control (CDC) confirmed the infections to a reporter and said other townships had also had infections. When asked whether the anthrax had spread to humans, the employee said he didn't know because leaders were in a meeting. He could only say it was under investigation

A compilation of screenshots by secretchina.com displayed a July 27 "Notice on strengthening prevention and control work" issued by the Shandong Province Livestock Veterinary Bureau. The notice said the Bureau had been notified by telephone that 4 cattle had tested positive for anthrax. The notice said Yanggu county "appeared to have quite a few problems" and the Bureau said it would be conducting tests focused on Qi'er village.

Screenshots from local social media posted on X August 1 (the day before the official report) said 80 of 100 cattle on the Qiji Town farm had died of anthrax without being reported to higher authorities. Three villages were locked down, and the 4th floor of the county hospital had been sealed off. The post warned readers not to eat in Qiji Town. Other posts reported the number of dead animals as '40' and '80 to 90', and a rumor said 15 people were hospitalized.

Another post said that the beef cattle farm owner at first denied having sold his diseased cattle, but later admitted that he had frozen most of the beef but sold some bones when he ran out of storage. 

Several detailed descriptions of anthrax have been published by Chinese scientists in English-language journals. A chronicle of over 120,000 human anthrax cases reported to China's CDC from 1955 to 2014 found that cases had been on the decline since 1978. Most infections were among farmers, herdsmen, and people who slaughter animals or trade in meat, bones or tallow in western and northeastern provinces where cattle and sheep are common. Cases are most common during the summer months of July and August. 

A more recent epidemiological study of human anthrax in China reported 1,244 cases in 53 outbreaks during 2018-21. This study noted a rebound in anthrax cases in 2021: the number of cases increased and cases occurred in new locations. Most human infections were on the skin (not respiratory or gastrointestinal). The authors attributed the anthrax rebound to inadequate supervision of diseased animals as well as updated diagnostic criteria. (Note that the 2021 anthrax rebound followed several years of high attention to animal disease prevention during the African swine fever epidemic of 2018-20). 

Another study investigated a very similar anthrax outbreak during 2021 that also occurred in western Shandong Province. No cases had been reported in Shandong since 2015 when the 2021 outbreak occurred. In August 2021 the local public health center reported 7 cutaneous cases to China's CDC. The outbreak occurred in 2 towns and 3 villages in Cao County, part of the Heze prefecture. The authors searched medical records and found an additional 6 cases of confirmed anthrax, increasing the known total of cases to 13. They tested 125 samples from places where cattle were slaughtered, processed and stored and found 34 positive samples for 8 strains of the anthrax bacillus in freezers, cutting boards, a meat grinder, the ground where cattle were slaughtered, a butcher shop floor, a cattle truck, bone cutter, freezer handle, meat hook, bone saws, and meat carts.

The infections in 2021 were traced to a single family that had purchased 32 cattle from a neighboring province, of which 20 cattle had been in poor health since July. The sick cattle were sold to families in 3 villages where family members and others who slaughtered the cattle apparently contracted anthrax during July and August 2021. One sickened person picked up tallow and bones to sell and another bought beef from the infected farm.

The study of the 2021 outbreak identified the frequent movement of livestock across provinces as a contributing factor. The address on the animal health certificate appeared to be fraudulent, so the original source of the cattle could not be determined. Fraudulent certificates and interregional animal shipments had been identified as contributing factors to the rapid spread of the ASF epidemic 2 years earlier. High temperatures and rainy weather are also conducive to anthrax infections. They linked the skimpy clothing worn by butchers during hot summer months to skin infections.

The study authors said cutaneous anthrax is usually curable with prompt antibiotic treatment, but they also said 10-20% of patients die.