Tags: China | Trump Administration | pork | china | market | tariffs

US Pork Could See $25 Billion China Market Without Tariffs

US Pork Could See $25 Billion China Market Without Tariffs
(Ginasanders/Dreamstime)

Tuesday, 26 November 2019 12:23 PM

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 with Beijing started.

American producers sent about $19.5 billion in farm products to the Asian country that year, according to government data. And it would be more than 20 times the total $1.1 billion in U.S. pork and pork products exported to China and Hong Kong in 2017.

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 pork production.

The Asian country had a 12% duty on frozen pork before the trade war and has now added a 60% punitive tariff. Currently, China’s customs processing is restricting imports of non-frozen U.S. pork, Hayes said.

The pork producers group released the forecast on Tuesday as they pressed the Trump administration to emphasize access for pork products in ongoing talks with Beijing for a partial trade agreement.

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% from a year earlier. The meat is a staple in the Chinese diet. While American exports have climbed amid the Chinese protein gap, meat suppliers in Brazil have seen even stronger demand.

Even with the punitive tariffs, U.S. pork exports to China are on track to set a record this year and monthly hog slaughter in the U.S. set a record in October.

“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,” David Herring, president of the producer association and a hog farmer from Lillington, North Carolina, said in a statement.

Hayes said the analysis assumes that Chinese consumption of pork would rebound to its level prior to the swine fever epidemic. He concluded that the nation’s domestic industry wouldn’t return to prior production levels if tariffs are dropped now on U.S. pork since the American product is significantly less expensive than the cost to produce in China.

Hayes projected that without tariffs, China would import 35% of its pork -- a level similar to Mexico and Australia after they concluded free-trade agreements -- and U.S. producers would capture half that market. The gains in U.S. pork exports would add 184,000 new jobs in the next decade, Hayes forecast.

The pork group launched a digital media campaign to promote opening the Chinese market as a priority for the trade talks.

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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.
pork, china, market, tariffs
496
2019-23-26
Tuesday, 26 November 2019 12:23 PM
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