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Pork Producers Hope to Break Down Trade Barriers

07:24AM Jun 18, 2013
berksire hogs

Opening the doors to new trading partners comes with its own set of challenges.

As pork producers gear up for another volatile year, it’s opening new trade doors that remains a top concern for leaders in the pork industry.

"Last year, in 2012, we exported 27% of our product," says Howard Hill, National Pork Producers Council (NPPC) President-elect. "The world knows where to come to get good-quality pork and they also know that we're the low-cost producers."

USDA says that despite trader barriers, net pork exports increased nearly eleven-fold since 2000.

National Pork Producers Council says free-trade agreements, specifically the Trans-Pacific Partnership (TPP), are a main focus when it comes to developing more trade opportunities.

"Even though we do export a lot of pork product to Japan and we are paying gate prices, there are some restrictions that are there," says NPPC President Randy Spronk. "And we think through this negotiation, if we can bring those tariffs down to zero, if we can remove all non-tariff trade barriers like we've done with South Korea, Columbia and Panama, we have a great opportunity to double our exports to Japan, which is a phenomenal market."

Another agreement in the works is the U.S.-EU Free Trade Agreement. Spronk says expectations are for the EU to eliminate tariffs and barriers.

Not everyone is as bullish on the trade opportunities with Europe, seeing it as a constant struggle.

"I think the toughest battle is almost always the EU," says Steve Meyer, president of Paragon Economics. "They're pros at protectionism. My experience is, every time we solve one issue with the EU, we find another one."

They say the main issue with overall trade is always gaining access to new trading partners. Mayer says when looking at China, the recent Smithfield acquisition may play in the pork industry’s favor.

"I think it probably causes our exports to China to grow faster than they otherwise would have," says Meyer. "I think they were going to grow anyway, but this probably greases the skids on these some."

One barrier for trade in countries like China and Russia is a product that contains the feed additive ractopamine. Many in the pork industry say countries banning exports due to ractopamine is just smoke and mirrors.

"We just don't think that using it as a trade barrier is the proper way to do it," Hill says. "We know there are countries that are probably using ractopamine, but yet they want to keep pork from the outside out. They’re using this as a trade barrier."

"I think there are people who are going to bring these up all the time," says Meyer. "Sometimes they are going to be legitimate, maybe, often they won’t be, but that doesn't mean they won't come into play."

If a customer wants a product the certain way, however, Meyer says it’s the U.S. pork industry’s job to provide them with what they want.

"I don't have a problem taking them ractopamine-free product, as long as they pay for the $5 a head that we have to pay to leave on the table by not using the product," he says.

Despite different obstacles and demands, leaders feel strongly that the work being done will help U.S. exports continue to grow.