WASHINGTON, May 11, 2016 - U.S. pork exports to China are rising sharply and there’s no sign of a slowdown anytime soon.
Exporters shipped about $72 million worth of pork to China in just the first three months of this year, a 250 percent increase from the same period in 2015, according to data from USDA’s Foreign Agricultural Service, showing a welcoming trend for the industry.
China is producing an abundance of many commodities like steel and aluminum, but pork production just isn’t meeting demand, said Joe Schuele, communications director for the U.S. Meat Export Federation. And until it does, U.S. pork producers will be living high on the hog.
Even a strong dollar compared to the yuan and competition from Europe aren’t slowing the spurt of U.S. exports, although E.U. countries are also benefitting from China’s rising demand.
“China has such a massive pork industry,” Schuele said. “They produce and consume half of the world’s pork, so when there are fluctuations in their domestic production – even small fluctuations – it can really increase their need for imports. China goes through these production cycles like a lot of other countries, it’s just that their production cycle is on a world-scale.”
China’s boom in imports began about midway through last year, but the U.S. could have missed out on the opportunity had companies here not rushed to get certified under a relatively new USDA program that’s become a requirement for Chinese importers.
China has been concerned about residues of the animal drug ractopamine in U.S. pork for years and periodically halted imports from American companies when traces were found in shipments. But it wasn’t until Russia virtually banned U.S. beef and pork over the drug in early 2013 that USDA addressed the situation through a certification program.
It was the USDA’s Agricultural Marketing Service later that year that put together and implemented the Never Fed Beta Agonists Program, a process verification system that provides a means for the agency to promise importing countries that suppliers did not use the drug.
Ractopamine is a widely popular beta-agonist class drug used to bulk up swine and cattle before slaughter. The FDA and the World Health Organization’s Codex Alimentarius have approved its use by farmers but Russia and China have never accepted those assessments.
USDA unveiled the Never Fed Beta Agonists Program in November 2013 and U.S. slaughterhouses and cold storage companies began applying for certification. China agreed to accept the certification under the AMS program and made it a requirement for trade.
“Yes, demand is way up, but also we are better positioned to export to China than we were a year ago at this time,” USMEF’s Schuele said. “Now we’re better able to take advantage of the opportunity because we have more plants eligible to ship (to China) and I think we’re also seeing more ractopamine-free production. Anecdotally, you’re seeing more producers produce the ractopamine-free products because they want access to markets like China.”
Since July 2014, 18 pork processors and cold storage companies including operations owned by John Morrell & Co., Seaboard Foods, Smithfield Farmland and Tyson Fresh Meats have been approved under the Never Fed Beta Agonists Program.
So how much longer will these newly approved companies be seeing unusually strong demand from China? That’s unclear, Schuele said.
China still has a lot of small-scale pork producers going through tough times now and are more likely to go out of business than operations in more advanced countries with better financing systems, Schuele explained.
“China’s hog production is moving away from small producers to a more industrialized industry, but as that shift is taking place, you still have a number of small producers that will go out of business during down cycles,” he said. “That compounds the issue of domestic supply. You’ll likely see China’s domestic production rebound at some point, but it’s just hard to say when that will be.”
#30
For more news, go to: www.Agri-Pulse.com
