U.S. pork producers missed the “opportunity of a lifetime” in 2019 as Chinese stocks were ravaged by African swine fever, but exports to the country dropped due to an ongoing trade conflict with the country, according to independent trader Dan Norcini, reported The Wall Street Journal (Jan. 8).
USDA data indicated Chinese importers opted instead to purchase pork from the EU and Brazil as U.S. product faced a 72% tariff. As of Dec. 1, 2019, there are over 77 million hogs and pigs on U.S. farms, up 3% from Dec. 2018, but down slightly from Sept. 1, 2019, according to the Quarterly Hogs and Pigs report published Dec. 23 by the agency’s National Agricultural Statistics Service.
Rabobank estimated China lost as much as 55% of its pigs due to the disease, yet hog futures on the Chicago Mercantile Exchange finished at about 71 cents per. lb., down nearly 30% from April when prices reached nearly $1 per lb.
China’s meat imports posted the fastest growth in 2019, compared to other major staple commodities, according to data from the General Administration of Customs. The country’s pork imports surged 75% year-on-year to 2.1-million metric tons, while beef jumped by 59.7% to 1.7-million metric tons, reported China Daily (Jan. 14).
However, industry experts are hopeful fortunes will reverse in 2020 as a limited trade agreement between the U.S. and China takes hold. China reportedly will begin purchasing $40 billion to $50 billion in additional agricultural products from the U.S. annually starting Jan. 15.
“I’m telling our customers to be ready for a ‘flip of the light switch’ change in attitude and direction of cash hog prices and cutout values starting [in] January,” said Dennis Smith, a commodity broker with Archer Financial Services Inc. “I look for huge shipments to China to tighten the available pork supply in quick fashion.”
Not all news was negative: U.S. pork exports in November reached a new monthly high in 2019 when 259,812-metric tons were shipped, representing a 26% increase year-over-year and 11% over the previous high of July 2019, according to the U.S. Meat Export Federation. Value was up 32% to $712.7 million when compared to 2018.