BUSINESS Hog farmers increasingly worried about prospects

BUSINESS

Hog farmers increasingly worried about prospects

Xinhua

13:42, August 20, 2019

MINNEAPOLIS, United States - US pork farmers are increasingly worried that their longtime efforts to secure a foothold in China are vaporizing, due to continued trade disputes between the world's two largest economies.

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Pigs are raised at a hog farm in Ryan, Iowa, the United States, on May 18. (Photo: Agencies)

The protracted trade tensions may dampen the outlook for their access to China, the world's biggest pork market, and consequently cripple the entire industry.

"Without a doubt, we would love to have access to the Chinese market... There's a tremendous demand in China, and we can certainly fill some of that demand," David Preisler, chief executive officer of the Minnesota Pork Producers Association, told Xinhua News Agency.

"Unfortunately, it's unrealized potential at this point. We can't necessarily control that," said the industry leader, adding that "the biggest hope, first of all, is that the United States and China can work something out".

He made the remarks at Minnesota Farmfest, a large-scale agricultural trade show concluded in the Midwest US state on Aug 8, where trade issues were a hot topic.

US hog farmers have been suffering during the US-China trade rifts, which started more than a year ago.

Since 2018, the US administration has placed several rounds of punitive tariffs on Chinese imports. In retaliation to the moves, US pork entering China is among the US imports that have been levied by the Chinese side.

According to the US authorities, American hog farmers are estimated to be losing out on $1 billion annually due to the trade tensions with China.

David Herring, president of the National Pork Producers Council, told a US House Agriculture subcommittee in a hearing last month that retaliatory tariffs imposed by China and other countries are "one of the most damaging threats" to his industry.

Preisler told Xinhua that his team has currently projected "a slight profit" for the coming year, down from a previous estimate of "about $20 to $25 per head" three weeks ago.

"It's been negative toward the futures market and that's just an indication of what the market thinks prices are going to be in the future," he added.

More than 25 percent of the country's total pork production is exported, with China being a major buyer, according to data from the US Meat Export Federation.

In terms of volume, Mexico and Japan are the two largest export markets for US pork, Preisler said, "prior to the trade disputes, China would be right up there".

Due to different dietary cultures, China has been historically an important complementary market for US pork, said Preisler.

The industry leader noted that stable trading with China has had a positive effect on the local economy, especially in Minnesota, where some 3,000 farms raise about 16.5 million pigs per year, making it the second-largest pork producing state in the United States.

Earlier this year, US hog farmers had some hope that the tensions would be resolved soon, driven by the positive signs in trade negotiations.

However, the situation has become worrisome in recent months, as the US administration threatened to impose further tariffs on Chinese imports.

The longer trade tensions with China linger, the more American farmers will see their window of opportunity close as competitors claim parts of the Chinese market share, said Preisler.

"If China goes to other customers to find pork, well, they may just stay with those customers even after a dispute is settled," he added.

Pork producers are also frustrated that they may miss a prime opportunity to secure a share of the lucrative market when there is huge potential concerning China's need for imported pork.

Official data showed that China's hog stock declined by over 20 percent year-on-year in May due to multiple factors, including African swine fever and higher costs of pig breeding.

So far, many individuals, organizations and business groups in the United States have voiced their concern about the tariffs' ripple effects on both relative industries and the broader US economy while hoping for a final settlement.

US anti-tariff advocacy group Tariffs Hurt the Heartland warned that as the country's trade disputes with its trading partners persist, repercussions will be felt by farmers, factory workers and consumers nationwide.

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