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
