US meat exports to China soar
US President Donald Trump ordered meat processing plants to stay available to protect the nation’s food supply even as personnel got sick and died. The plants have increasingly been exporting to China while US consumers face shortages, a Reuters analysis of government data showed.
Trump, who is within an acrimonious public dispute with Beijing over its handling of the coronavirus outbreak, invoked the 1950 Defence Production Act on April 28 to keep plants open. Now he's facing criticism from some lawmakers, consumers and plant employees for putting personnel at risk in part to greatly help ensure China’s meat supply.
Meat buyers in China ramped up imports from all over the world as a pig disease decimated its herd, the world’s largest, and pushed Chinese pork prices to record highs. The supply shock drove China to pay more for US meat than other countries, and even US consumers, since late 2019.
“We know that as time passes exports are critically important. I believe we need to concentrate on meeting domestic demand at this point,” said Mike Naig, the agriculture secretary in the most notable US pork-producing state of Iowa who supported Trump’s order.
Processors including Smithfield Foods, owned by China’s WH Group Ltd, Brazilian-owned JBS USA and Tyson Foods Inc temporarily closed about 20 US meat plants as the virus infected a large number of employees, prompting meatpackers and grocers to warn of shortages. Some plants have resumed limited businesses as workers afraid to getting sick stay home.
The disruptions mean consumers could see 30% less meat in supermarkets by the end of May, at prices 20% higher than this past year, according to Will Sawyer, lead economist at agricultural lender CoBank.
While pork supplies tightened as the quantity of pigs slaughtered each day plunged by about 40% since mid-March, shipments of American pork to China more than quadrupled over the same period, according to US Department of Agriculture data.
Smithfield, which China’s WH Group bought for $4.7 billion in 2013, was the largest US exporter to China from January to March, according to Panjiva, a division of S&P Global Market Intelligence. Smithfield shipped at least 13,680 tonnes by sea in March, Panjiva said, citing its most recent data.
Smithfield, the world’s biggest pork processor, said in April that US plant closures were pushing retailers “perilously close to the edge” on supplies.
The company is currently retooling its namesake pork plant in Smithfield, Virginia, to supply fresh pork, bacon and ham to more US consumers, according to a statement. The move is an about-face following the company reconfigured the plant last year to process hog carcasses for the Chinese market, employees, local officials and industry sources told Reuters.
The Virginia facility currently serves export markets like China and domestic customers, according to Smithfield. Most US pork processors routinely export products to more than 40 international markets, company spokeswoman Keira Lombardo said.
The virus infected about 850 employees at another Smithfield pork plant in Sioux Falls, South Dakota. Across the US industry, about 5,000 infections and 20 deaths occurred, in line with the US Centres for Disease Control and Prevention.
“That tragic outcome is all of the worse when the meals being processed is not going to our nation’s families,” said US Representative Rosa DeLauro, a Democrat from Connecticut. “That's what the Defence Production Act is centered on: protecting America’s national interests, not China’s.”
Pork processor Fresh Mark resumed making bacon and ham for global customers at a Salem, Ohio, plant it shut in April over coronavirus cases.
“If we start having a shortage in the us, I think it will stay here,” said Bruce Fatherly, a maintenance worker at the plant and person in the Retail, Wholesale and Department Store Union.
WHOLE HOGS
The supply concerns cannot have been foreseen when Trump signed a deal in January to help ease a trade war he started with Beijing 2 yrs earlier. China promised to improve purchases folks farm goods by at least $12.5 billion in 2020 and $19.5 billion in 2021, over the 2017 level of $24 billion.
The White House declined to comment. The USDA and US Trade Representative’s office did not respond to requests for comment.
China increased its purchases due to its dire dependence on protein after the pig disease African swine fever led to the death of half the country’s herd in the last two years. Beijing lifted a almost five-year ban on US chicken imports in November and in addition waived retaliatory tariffs on meat shipments to greatly help boost supplies.
Year-to-date, about 31% of US pork has been exported, totalling about 838,000 tonnes, according to the US Meat Export Federation. One-third of this volume visited China, accounting for a lot more than 10% of total first-quarter production, the industry group said. It added that exports assist in US production by raising overall demand.
Carcasses, which include the majority of the pig, were the most notable product shipped to China in January and February, according to USDA. Loads likewise incorporate feet and organs that many Americans usually do not eat.
Exports to China set an archive for the time from January to March, and shipments to all or any destinations in March set an archive for any month, according to USDA.
JBS, which produces pork, beef and chicken, told Reuters it reduced exports to focus on meeting US demand through the pandemic. About 280 employees at a JBS beef plant in Greeley, Colorado, have already been infected with the virus, and seven died, union officials said.
“I think we must manage our country and our needs first,” said Kim Cordova, president of the local United Food and Commercial Workers International Union that represents plant employees.
Tyson Foods President Dean Banks said on a conference call last week that he expects China’s demand for US pork to stay strong since it recovers from a COVID-19 lockdown.
Suppliers like Tyson have limited meat products for American retailers as a result of plant closures. Kroger Co and Costco Wholesale Corp, meanwhile, restricted shoppers’ meat purchases.
US farmers, who struggled financially through the trade war with Beijing, say they still need importing countries, including China, to get their pork. Prior the pandemic, they grappled with an oversupply of hogs.
“There’s enough meat for all channels if we're able to get these plants back up and rolling,” said Brian Duncan, a hog farmer and vice president of the Illinois Farm Bureau.
