Relief for the US pork industry, as China-US trade talk enters phase one
Negotiations between China and the US administration shows signs of progress as "phase one" in a possible trade agreement has been reached. This phase is supposed to include $50 billion in agriculture purchases by China. Supposedly 30 million tonnes of soybeans and an unspecified amount of pork. In return, the U.S. will not increase a planned tariff increase scheduled for October 15.
"Let’s assume they start taking offal’s and other cuts, the key is removing pork from the US domestic market.
With hogs at $2.11 lb in China, US pork can be over $1.00 lb. and still pay a 70% tariff. Point is, flowing pork to China at any significant level can put 10? lb. on US hogs in a very short time. This is good news for US swine producers," believes Jim Long, Jim Long, President-CEO, Genesus Inc.
Last week, USDA confirmed record sales of pork to China including 18,810 tonnes for shipment this year and 123,362 tonnes for shipment in 2020. "Our farmer arithmetic tells us the total is equal to about 1.5 million market hogs in carcass equivalent", added Mr. Long.
At the beginning of the week, the Chinese Ministry of Agriculture announced that China’s sow inventory is down 38.9% in September from a year ago and pig herd down 41.1%. These figures indicate a massive decline in China's swine population. The numbers also show a continual decline with the sow herd down 1.5% and pig herd 2.4% from a month ago.
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