US pork shortage could be on the horizon, Smithfield warns

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Dive Brief:

  • U.S. pork producers may need to ramp up production and export more pork to China, which has lost millions of hogs to African swine fever. Doing so could crimp supplies of pork bellies, ham and related products for U.S. consumers in 2020, Arnold Silver, Smithfield Foods’ director of raw materials, said last week at the Urner Barry Global Protein Summit in Chicago, Bloomberg reported.
  • Silver noted the Chinese are “insatiable in their appetite for pork,” but he also said Smithfield, the largest global pork producer, will first supply its longtime U.S. customer base before it exports meat to China.
  • While Asian demand is increasing because of the impacts of the swine fever, China continues to levy retaliatory tariffs on U.S. pork. Silver told Bloomberg if those tariffs end, U.S. exports are likely to increase even further. U.S. global pork exports are expected to grow by 12% this year and 14% next year, according to figures Bloomberg cited from the U.S. Meat Export Federation.

Dive Insight:

African swine fever has killed nearly five million pigs across six Asian countries, according to the Food and Agriculture Organization (FAO) of the United Nations. First detected in Asia in the summer of 2018, the fever is a contagious viral disease affecting both domestic and wild pigs. It can cause fatalities, and there is no commercially available vaccine, FAO said.

So far, the fever outbreak has been limited to China, Cambodia, East Timor, Hong Kong, North Korea, South Korea, Laos, Myanmar, the Philippines and Vietnam. However, Europe has been experiencing a slowly spreading epidemic in its wild pig population, so countries have tightly restricted movements to try to control it. Pork producers in China and Vietnam have been particularly affected since pork makes up a large proportion of the meat consumed, FAO found.

African swine fever has not been detected in the U.S., according to the U.S. Department of Agriculture’s Animal and Plant Health Inspection Service. The USDA calls the fever “a devastating, deadly disease that would have a significant impact on U.S. livestock producers, their communities and the economy if it were found here.” The agency also said it is coordinating with other federal and state government groups, the swine industry and pork producers to do whatever is necessary to protect the U.S. pig population from the fever.

The pork industry has a lot to lose if the disease is ever found here. According to the National Pork Producers Council, there are more than 60,000 producers in the country who market more than 115 million hogs each year. Gross income from these animals on average totals more than $20 billion, the council said.

The industry also stands to gain if the trade standoff between the U.S. and China comes to an end. Reuters reported China increased U.S. pork purchases before last week’s talks between President Trump and Chinese Vice Premier Liu He. Other signs of a thaw include the U.S. lifting a proposed tariff increase set to kick in this week and China making other agricultural concessions, AgWeb reported. But while some farmers hailed the initial good news, they want to see tangible benefits. The pork council is advocating permanent removal of Chinese tariffs on U.S. pork, the group said in a recent statement. 

“With African swine fever dramatically reducing domestic production, the United States is well positioned to meet China’s need for safe, nutritious and affordable pork and to manage an emerging food price inflation challenge. In doing so, U.S. pork can single handedly put a huge dent in the United States’ trade imbalance with China,” the council said.

Should trade relations normalize between the two countries, China might continue to increase U.S. pork imports, particularly if the swine fever situation doesn’t improve or gets worse. U.S. pork producers could then end up being the beneficiaries of both developments. But if, as Smithfield’s Silver predicted, pork shortages come, then consumers who want them in the U.S. — and manufacturers who rely on them — could pay the price.

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