According to an article in Bloomberg online, China will ‘“quickly resume”’ imports of US pork products. After meeting with American officials about resuming the imports, China’s Agriculture Minister Sun Zhengcai said the importation of US pork will resume and he asked “that the quality of the products be assured [.]”Commenting from Hangzhou, US Department of Agriculture (USDA) Secretary Tom Vilsack said the US expects another announcement soon in which the ban imposed by China will be lifted. According to Bloomberg, China is both the largest producer and consumer of pork in the world. Following the H1N1 outbreak in April, the Asian nation began blocking shipments of pork products from 49 states. As has been reported all summer, concern over the H1N1 virus, which cannot be contracted from consuming pork products, has caused demand all over the world to drop. This has hurt US producers financially.
Following Japan, China and Hong Kong was “the second-largest buyer of US pork last year [.]” Yet, in the first eight months of 2009, the pork industry has seen exports to this region drop 70 percent in comparison to the same period in 2008. In September the USDA’s Foreign Agricultural Service said in a report that the value of live swine and swine products exported to China in 2008 was roughly $500 million.
Total imports in 2009 are expected to slide 66 percent to 150,000 tons after China recovered from an outbreak of blue ear disease and because of restrictions on U.S. shipments, the report said. Hog futures, the third-worst commodity investment of 2009, have dropped about 22 percent in Chicago since April 23, when swine flu began making headlines.These drops have caused the largest producer of pork in the US, Smithfield Foods Inc., to see its first annual loss since 1975 in June. Through August 2, 2009 the company “reported a $162.1 million deficit for its hog-production unit” in the three months following the June report.
As a result of lower prices and H1N1 concerns, the industry has repeatedly asked for the government to purchase excess products to keep the industry afloat. Still, as recently as October 22, 2009 Rod Brenneman, chief executive officer of Seaboard Foods LLC, “the second biggest US producer, told a House Agriculture Committee panel” that the industry still needed funds to be made immediately available to purchase more products “to keep hog farmers in business [.]”
The industry is obviously struggling, but perhaps the decision by China will help the hog industry rebound when imports are finally let into the country.
To read the Bloomberg article click here.
Posted: 10/29/09
