Declining exports concern U.S. pork industry

DES MOINES, Iowa — Pork exports are a point of concern for the U.S. pork industry, according to an industry analyst.

“We’ve temporarily lost our competitive position in world pork markets. Fewer pigs are coming to the markets and there’s less available,” said Dermot Hayes, professor of economics, Pioneer Chair in Agribusiness and Charles F. Curtiss Distinguished Professor in Agriculture and Life Sciences at Iowa State University.

U.S. pork exports are down overall, including to China. That decrease is due to a combination of factors. China purchased a record amount of U.S. pork in 2020 due to the African swine fever outbreak there.

“They went to the biggest supplier and they bought a bunch of pork from us and that was the boneless pork that we exported in March-May of 2020,” Hayes said.

In April 2018, China imposed a 25% tariff on U.S. pork in retaliation for then-President Donald Trump’s imposition of a tariff on steel and aluminum imports into the United States. That tariff remains in place today.

“They came to us when they were desperate, but we are paying an extra 25% duty over and above our competitors,” Hayes said.

“Things are are surprisingly bad, short term, for us.”

—  Dermot Hayes, professor of economics, Iowa State University

China has turned to cheaper European pork, which does not have the 25% tariff.

“In just one quarter, Spain was able to export almost half a million tons of pork to China,” said Hayes, who added that Spain has become a major supplier of pork to China.

But China has managed to rebuild its swine herd, at least in part, and Hayes noted that has caused China’s pork imports to drop overall.

“I think the Chinese statistics are a reflection of what the government wants to hear rather than what’s going on. They claim to have rebuilt their herd at an enormously fast rate of speed. I don’t think they did, but I do think they are getting up there,” Hayes said.

In August 2021, the Chinese government announced its minimum sow herd inventory would not be less than 40 million breeding animals through 2025.

“Their slaughter rate has recovered and that is probably a good number,” Hayes said.

With less exports going to China, EU nations, like Spain, have become competitive with the United States in other Asian markets, including South Korea, Japan and Vietnam.

“Some of the big declines in exports have to do with us not having a lot of pork, charging a lot for it, with China having a lot of pork and not buying as much, and Europe having a surplus and having to find a home for it. So, things are surprisingly bad, short term, for us,” Hayes said.

“Germany was a top two or three exporter to China. They had African swine fever and they lost that business,” Hayes said to his audience at the World Pork Expo in Des Moines.

The thought that the United States could be the next country stricken with African swine fever was enhanced by Hayes’ update on U.S. pork imports.

“We have now become a pork importer. We imported in 2020, 91,000 pounds of pork, and, so far this year, 162,000. We buy pork from Canada, of course, but more recently, Mexico, Denmark and Poland. Poland has African swine fever, which strikes me as a bit odd, and Brazil. We are concerned about some of the places we are importing from because of the enormous danger of importing a foreign animal disease,” Hayes said.