‘We are bleeding’: U.S. hog producer

DES MOINES, Iowa — Hog farmers and pork industry players were upset, dismayed and angry at the World Pork Expo.

They became the first victims of retaliation by Mexico and China for United States President Donald Trump’s tariffs on foreign steel and aluminum, and they didn’t hide their suffering.

“We are bleeding,” said Ohio hog farmer and National Pork Producers Council President Jim Heimerl, opening a press conference at the Expo June 6. “We’re starting to take on water fast.”

NPPC international trade champion Nick Giordano said “Producers are hurting.”

Mexico and China were fast to strike back against Trump’s metal tariffs, hitting parts of the U.S. economy where Trump is likely to hear about it. Industry players noted that most farmers and industry managers and owners probably voted for Trump in the presidential election, so they hope Trump recognizes the impact his actions are having on a core group of supporters.

Steve Meyer, a leading hog industry analyst, said the Chinese tariffs won’t have much real impact this year because China was already reducing pork imports and suffering a domestic glut.

But the Mexican tariffs hit a key U.S. market this year, one that is growing, and will depress prices for U.S. producers.

The profitability outlook is already poor for 2018-19, so facing tariffs isn’t helpful, with some farmers expected to lose money over the next year and a half.

At one time, the U.S. was not greatly exposed to foreign tariffs. Until the mid-1990s it was a net pork importer.

However, aggressive investment in and expansion of the industry, matched with multiple trade deals that opened market access to U.S. pork, led to a surge in U.S. pork production, and in 2017 it exported more than 25 percent of its pork..

Producer and industry leaders were energetic supporters of many free trade deals, including the Trans-Pacific Partnership with Asia, and were bullish on their industry’s future until Trump took office.

Not only did farmers and pork companies expand hog production, but a number of big, new slaughter plants were built and are now going into full production.

However, when Trump took office, one of his first major acts was to reverse the U.S. decision to join the TPP, and the industry mood darkened.

A number of officials and analysts at the Expo said they thought some of the slaughter plants might not have been built if the proponents had known TPP would be cancelled and a trade war would break out with Mexico and China.

The U.S. Trade Representative’s chief agriculture negotiator, Gregg Doud, faced an awkward situation when he addressed the Expo, following Iowa Governor Kim Reynolds’ suggestion that “Now is the time to call an end to the recent trade disputes.”

Doud underlined the importance of trade and market access, saying “This whole thing in agriculture hinges on trade.”

He said increasing meat exports are “the real opportunity” for U.S. agriculture and he tried to allay concerns about tensions with China by noting that “China’s going to need us in agriculture.”

However, he acknowledged that Trump’s actions mean that “there is or will be retaliation against U.S. agriculture….”

Still, he defended Trump’s actions, saying applying tariffs on certain foreign goods was a way to get better trade treatment for the U.S. in general.

“We have their attention,” Doud said.

He also condemned the European Union for speaking the language of free trade while effectively blocking much trade.

“They are absolutely unbelievable to deal with,” Doud said.

Giordano said the industry is trusting the Trump administration to resolve the trade disputes as soon as possible, but did not shy away from laying out the cost to farmers and processors.

“We’re holding our breath. There’s blood in the water,” said Giordano.

“The important thing for us is to preserve our ability to trade…. We’ve been an engine of economic growth for rural America…. We’re taking a step back now.”

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