CHINESE PORK TARIFFS AND CORN: WHAT’S IT MEAN TO YOU?

Tricia Braid

Apr, 05, 2018  |  Today's News |  Livestock |  Exports |  Legislation & Regulation

A 25 percent tariff on U.S. pork exports to China ain’t chump-change, so to speak if you consider that the U.S. pork industry literally consumes 25% of the domestic corn meal market. According to the U.S. Meat Export Federation, “Exports have been a key driver of growth in the U.S. pork industry, and with nearly 27 percent of U.S. pork production exported last year, international trade is critical to the continued success and profitability of the U.S. industry. China is a leading destination for U.S. pork and especially for pork variety meat. In 2017, U.S. exported 495,637 metric tons (mt) of pork and pork variety meat to China/Hong Kong, valued at $1.08 billion – our second-largest international market by volume and third-largest by value. For pork variety meat exports only, this was our largest destination in both volume (321,116 mt) and value ($741.8 million), accounting for 63 percent of U.S. export value. Variety meat exports make a critical contribution to industry profitability, and last year these exports to China/Hong Kong alone equated to more than $6.00 per U.S. hog slaughtered.”

 

To put this in real terms, each eight-ounce center-cut pork chop requires 2.1 pounds of corn, 0.12 pounds of DDGS, and 0.46 pounds of soybean meal.

 

Each pig at market weight (~284 pounds) has fed on 11 bushels/616 pounds of corn, 37 pounds of DDGS, and 136 pounds of soybean meal.

 

It is estimated that 1 in every 2.75 pounds of additional U.S. pork produced over the next 10 years will be exported.

 

It is understood that China is a very price sensitive market, so any tariff increase will affect the competitive position of U.S. pig farmers in that market. Right now, the difference between pig farmers making and losing money is the value of exports. Pig farmers receive an extra $53/hog due to exports and more than 110,000 U.S. jobs are due to pork exports.

 

In Illinois, specifically, the swine industry is our top in-state livestock consumer of corn, with over 80% of the corn fed to livestock in Illinois going to hogs. This is a valuable relationship to corn farmers.