African Swine Fever May Tip Scales for U.S. in Trade Talks

Trade negotiations with China are continuing daily by phone and video conference. No face-to-face meetings have yet been scheduled, and Bloomberg reported recently that the Trump-Xi signing summit wouldn’t happen until at least April.

The spread of African swine fever has a factor in negotiations and could favor the U.S. as talks continue. Arlan Suderman, chief commodities economist with INTL FCStone, said the disease has become a big problem in China.

“Our team in Shanghai tells us that they believe that hog feeding is down 20 percent. That they’ve liquidated 10 million sows, that compares to a breeding herd in the United States of about 6.3 million. So, that’s a major liquidation that’s taken place. Soymeal demand is down similarly.”

Suderman says signs are pointing toward China needing U.S. pork sooner rather than later.

“Over the last week to 10 days, we have seen a sharp increase in pork prices across much of China as tightness in supplies is now starting to develop. Initially we had a surge of supplies as producers liquidated their herds. Now we’re starting to see the tightness start to develop, and that’s raising hopes that maybe we will see a significant uptick in imports of U.S. pork.”

U.S. Trade Representative Robert Lighthizer told lawmakers this past week a China deal is “50-50” right now.

In a different forum last week, Lighthizer declined to rule out the possibility that the Trump administration may lift tariffs against China before it has verified that Beijing has agreed to all of its obligations under any trade deal.

Sources: Hoosier Ag Today, Washington Examiner