Two American giants are getting prepared to start massive pork exports to China
JBS and Smithfield USA announced that they will now stop accepting swine fed Ractopamine, a growth promoter that is forbidden in the Chinese market. That gives hopes for the US pork industry that tariffs imposed in the trade war between Washington and Beijing will be eliminated or at least will go down to an acceptable level.
"Both U.S. pork and beef are at a disadvantage in China due to retaliatory duties, but even with this extra burden U.S. red meat is making its way into China. However, the U.S. industry will be better positioned to serve the Chinese market if we can get back on a level playing field with our competitors," declared Dan Halstrom, President and CEO of the US Meat Export Federation, in an interview for EuroMeat News.
"Combined Smithfield and JBS at 213,000 per day are over 40% U.S. total packer capacity", observes Mr Jim Long, President and CEO, Genesus Inc, in his latest global report.
By now, China's pig meat production has declined by 25%, according to a Rabobank analysis. The world's largest Agricultural bank also believes that the current drop in the Chinese pig herd is about 50%, meaning that the global pig inventory has lost 25% only on China's ASF situation. A drop of 10% to 15% in China's pork production is expected for 2020.
"Currently, China's average price is 28.52 RMB/kg or $1.81 U.S. live weight a lb. (a 260 lb hog-$470 U.S.). A further 10% drop is at least one million fewer market hogs a week on top of the current market hog supply. It’s mind-boggling. How high can prices go? The pressure to import pork will be even greater as every week China’s hog and pork supply declines," added Mr. Long.
Also, Dr. Steven McOrist shared his opinion on ASF situation in Southeast Asia, where a deficit of 5 million tonnes of pork is expected to be registered next year, as ASF is now present in countries such as Vietnam, Myanmar, Philippines, Laos, and Cambodia. That could represent a push for the US pork industry, which is currently facing tariffs of almost 70% on pork in the Chinese market, but also for Canada, who's pork exports in China have been suspended since July.