Trade conflicts with China left hog farmers wary. However, things may be looking up. Recently, China made their largest U.S. pork purchase in nearly two years. The ongoing outbreak of African Swine Fever has left Chinese pork prices high. This has created huge potential for new trade arrangements with China.
A Promising Start
With a trade conflict of this magnitude, you have to start somewhere. In this case, the start is the sale of 23,846 tons of U.S. pork. As a lasting result of the trade war, this sale came with a 62 percent import tariff imposed by China on U.S. pork.
The sales were the biggest to China since April 2017 and the third largest since the USDA began tracking pork export sales in 2013.
Pork is a main staple of Chinese diets. With ASF running rampant throughout the country, hog prices are climbing upward. With high prices and low supply, China has had to source pork from the U.S. Although it comes with a hefty import tariff, it is a promising start to rebuilding trade relationships.
Independent U.S. livestock analyst, Bob Brown said U.S. pork prices have declined enough to offset Beijing’s tariffs.
Furthermore, China also purchased large numbers of soybeans earlier this year. There have been rumors circulating of potential corn sales as well. Could more pork purchases be made in the near future?
“They are going to need pork and lots of it,” Dennis Smith, a commodity broker for Archer Financial Services in Chicago, said about China.
No End in Sight for ASF
Since August 2018, China’s ASF problem has grown. The disease has reached 111 confirmed cases in 28 provinces and regions. It is also suspected China may be underreporting ASF related deaths.
There is currently no treatment for ASF. Additionally, U.S. leaders believe it could take anywhere from 10 to 20 years to develop a vaccine. Though the disease poses no threat to humans, it is highly contagious and fatal in hogs.
With the current ASF situation, China may need to source more pork from the U.S.
Ag Nook’s related story titled, “Smuggled Pork Stopped at US Port”, considers if and how ASF will help trigger a break through in U.S. – China trade relations.
Trade conflicts with China have left the agriculture industry disheartened. For hog producers, the implications of the trade war left huge marks on their operations. However, things may be looking up. With China’s ASF situation, pork supply has been low. This drove them to import over 20,000 tons of U.S. pork. Will it stop there?
Image courtesy of Reuters