Producer Losses at $2.2 Billion Since March 1
The National Pork Producers called for a swift resolution of the United States-China trade dispute, paving the way for increased U.S. pork exports to the world’s largest pork-consuming nation. According to Iowa State University Economist Dermot Hayes, U.S. pork producers have lost $2.2 billion on an annualized basis due to events leading up to and following China’s 25 percent
“U.S. pork has invested significantly to ramp production to capitalize on growth opportunities around the world, including China and other markets throughout the Asia-Pacific region,” said Jim Heimerl, a Johnstown, Ohio pig farmer and president of the National Pork Producers Council. “We applaud the administration for making the expansion of agriculture exports a cornerstone of the discussions with China. We hope the next round of trade talks with China results in improved market access to a critical export market for U.S. pork and other farm products.”
“Since March 1, when speculation about Chinese retaliation against U.S. pork began, hog futures have dropped by $18 per animal, translating to a $2.2 billion loss on an annualized basis,” said Iowa States’ Hayes. “While not all of this lost value can be attributed to trade friction with China, it is certainly the main factor.”
The market disruption caused by export market uncertainty comes at a time when U.S. pork is expanding production to record levels. Five new pork processing plants have recently opened or will soon begin operations, increasing U.S. pork production capacity by approximately 10 percent from 2015 levels by next year. Exports accounted for more than $53 of the average $149 value of a hog last year and support over 110,000 U.S. jobs. The United States has, on average, been the top global supplier of pork over the last ten years.
“We produce the safest, highest-quality and most affordable pork in the world,” Heimerl added. “We are dependent on exports and are one of the few sectors of the U.S. economy that can immediately reduce the trade imbalance with China, where pork represents approximately ten percent of the consumer price index. Eliminating punitive tariffs and improving access to China by eliminating or reducing tariffs on frozen and chilled pork would result in an explosion of pork exports, contributing significantly to U.S. economic growth and reduction of the trade deficit.”