Pork Producers Put Dollars to Potential in China

U.S. pork producers see a potential $24.5 billion annual market in China within 10 years if the Trump administration can gain unrestricted trade access after the Asian country’s hog herd has been devastated by disease.

That would be more than the value of all U.S. agricultural exports to China in 2017, the year before the trade war began. American producers sent about $19.5 billion in farm products to the Asian country that year, according to government data.

That estimate represents more than a 20-fold increase for pork and pork products. In 2017, U.S. pork exports to China and Hong Kong totaled $1.1 billion.

Dermot Hayes, an Iowa State University economics professor who performed the analysis for the National Pork Producers Council, said the projection was based on a “best-case scenario” in which China drops all tariffs and barriers to pork imports, including speeding up customs processing to allow for imports of chilled pork. He also assumed no U.S. domestic obstacles to ramping up production.

The Asian country had a 12 percent duty on frozen pork before the trade war and has now added a 60 percent punitive tariff. China’s current customs process restricts imports of non-frozen U.S. pork.

The pork producers group released the forecast as they pressed the Trump administration to emphasize access for pork products in ongoing talks with Beijing.

The spread of African swine fever has ravaged China’s hog herd and by September had driven up the price of pork more than 69 percent from a year earlier.

“The U.S. pork industry is missing out on an unprecedented sales opportunity in China when it most needs an affordable, safe and reliable supply of its favored protein,” said David Herring, president of the producer association.

Source: Bloomberg