Farmers: Pork tariff situation improving, but still making impact
Even as the United States begins repairing trade relations with neighboring Mexico and Canada, its trade war with China continues.
One of the long list of products to see tariffs is pork and Iowa is the country’s top pork producer.
“It’s difficult to regain some of the market share that may have been lost during that,” said Green Mountain-area hog farmer Kaleb Applegate of the recently-ended pork tariffs with neighboring countries. “There are longer-term effects … it takes time to reestablish those trade avenues and build trust that the tariffs aren’t going to come again.”
At its peak, the pork tariffs from various countries were hitting Iowa hog farmers hard, Applegate said, particularly when it comes to China.
“Because there’s so much that we trade with China and China is such a growing country that needs so much, it’s so complex,” he said.
As a result of the tariffs, China cut off much of its purchasing of U.S. pork. With such a large buyer substantially out of the U.S. pork market, the price of pork began to go down as supply went up.
“You end up losing money on every pig you take to market,” Applegate said.
Meanwhile, soybean farmers in Iowa also dealt with tariffs on their products, which also decreased in monetary value. That was good for hog farmers like Applegate to buy lower-priced soybean feed for pigs, but it hurt grain farmers too.
However, disaster has struck China’s own pork industry, with African swine fever killing off a large portion of the east Asian country’s hogs. That has created a sudden demand for pork from other parts of the world, including the U.S., Applegate said.
That means Iowa pork farmers have seen their product value start to increase again.
“That was about a month and a half ago that the market started to feel the effect of that African swine fever,” Applegate said. “From the point those tariffs were put on until then, it was not fun to sell those pigs.”
Dal Grooms of the Iowa Pork Producers Association also said improved relations with Canada and Mexico will lead to an improvement in the market. Like Applegate, she said China’s issue with exporting pork is helping the U.S.
“We had some real pressure initially and still would love to sell into China without having the tariff issue,” Grooms said.
She said the slowly improving market hasn’t made up for the losses the U.S. pork industry has suffered since the tariffs have been in place.
Applegate said agricultural tariffs are not good for any farmer, but while grain farmers can store a portion of their crops to wait for the market to improve, he said pork farmers have no way to hold on to their products.
“When that pig hits 280 pounds it’s time,” he said. “It’s just whatever comes at you is what you take.”
He said poor markets caused by tariffs, if left unresolved, have the potential to cause some farmers to quit raising their own pork.
“The smaller guys such as myself would say ‘I’ve had enough, I’m tired of losing money,'” Applegate said. “You have more of the locals that would stop owning the pigs and they would go and it would become more integrated.”
He said that means smaller operations would rent out their facilities to larger hog operations to pay the bills.
Iowa farmers are set to get some financial support from the federal government after the United States Department of Agriculture announced $16 billion in aid to farmers impacted by the trade war.
“Today’s $16 billion aid package will help Iowa farmers recoup some of their losses; however, in the long term farmers need trade and not just aid. We have some of the most productive farmers in the world and they will always win when given unrestricted access to markets. I appreciate President (Donald) Trump for his efforts to secure critical aid for Iowa farmers while working to resolve the ongoing trade dispute,” said Gov. Kim Reynolds in a statement.
For more information on the aid package, go to https://www.usda.gov/media/press-releases/2019/05/23/usda-announces-support-farmers-impacted-unjustified-retaliation-and?utm_medium=email&utm_source=govdelivery