The ongoing struggle China has confining and preventing African swine fever (ASF) could increase market opportunities for U.S. pork producers, according to the National Pork Producers Council (NPPC).
“It’s unfortunate for Chinese consumers and producers; we feel for them,” said David Herring, during a NPPC press briefing in Washington, D.C., on Thursday. Herring, a hog farmer from Lillington, N.C., is president of the organization.
China’s struggles to prevent ASF have created what Herring described as a “hole in protein sources for China and throughout the world, which should create opportunity for our farmer producers.”
The importance of pork to the Chinese is hard to overstate. Each consumer there eats, on average, 120 pounds of pork annually—more than twice the average amount of pork that most U.S. consumers eat in a year. Half the world’s total pork is consumed in China.
In China, pork prices have escalated during the past year. Data published Tuesday by China’s National Bureau of Statistics show that the price of pork in China is nearly 50% higher today than during this same time in 2018. The average price of pork, excluding offal, in the week ended Aug. 23 was 31.77 yuan a kilogram ($2.02 a pound), according to data from China’s Ministry of Commerce and reported by the Wall Street Journal.
Who Will Benefit?
Some of the questions now have to do with how much trade potential is available for U.S. pork, according to Nick Giordano, NPPC vice president and counsel, global government affairs.
“China’s obviously got to import more pork and more meat protein,” Giordano said.
He noted that the large pork vacuum created by ASF has created upward price pressure, which will encourage other countries to ramp up their pork production.
“Brazil, Australia and Europe will likely increase their production. Then, presumably, we’ll have to compete more with them over the long haul,” Giordano said.
Under more normal conditions, he added, the U.S. pork industry would be the single-largest beneficiary. But ongoing tariffs have severely limited trade between the U.S. and China.
“Why have a 60% punitive tariff on something that you need,” Giordano asked, referencing the penalties China has imposed.
“They really need pork now. The escalation in prices and inflation are a big deal…. If China would roll back (punitive tariffs), we could ship a lot of pork there,” he added. “Single-handedly, U.S. pork could make a huge dent in the U.S.-China trade imbalance. We’re in a unique position where we can help both countries and somewhat diffuse the problem.”
During the NPPC briefing, participants weighed-in on other trade prospects, namely with Japan and Mexico.
U.S pork is very excited about Japan, Herring said, noting the country has been a customer for many years, and that a new opportunity is underway. “We can’t wait to get the deal done--it’s one of the greatest news tidbits we’ve had--but we don’t know all the details yet,” he added.
Herring also referenced U.S. trade relationships with Mexico and Canada.
“Together, they represent about 40% of our total pork exports in volume,” he said.
Herring added that strong relationships with countries such as Mexico and Canada are the reason U.S. pork has flourished. “We’ve grown the last 25 years because countries desire safe, affordable pork. It’s been a great story for the United States.”