NPPC continues to work with the Obama administration and members of Congress to ensure that China lifts its ban on U.S. pork imports. Chinese officials in late October pledged to reopen their market, which since April 2009 has been closed to U.S. pork because of an outbreak in humans of the H1N1 flu.
Recently, China dropped its ban on the importation of Canadian pork – a move that has prejudiced U.S. pork producers. On Feb. 25, in support of U.S. pork producers who have lost money since Sept. 2007, a bipartisan group of 22 U.S. senators sent a letter to USDA Sec. Tom Vilsack and USTR Ambassador Ron Kirk inquiring about the status of China’s reopening its market to American pork exports.
The same day, Rep. Ike Skelton, (D-Mo.), sent a letter to Kirk, encouraging the trade ambassador to continue working with Sec. Vilsack to ensure China’s commitment is kept. China has more potential, by far, than any market in the world for U.S. pork exports.
The U.S. is the low-cost producer and No. 1 pork exporter in the world. In addition to the H1N1 ban, China restricts U.S. pork through a non-science based ban on pork derived from hogs that have consumed the feed additive ractopamine.
China also lavishes huge subsidies on its domestic pork industry and it discriminates against imported pork and many other imported products through its value-added tax policies. Iowa State University economist Dermot Hayes estimates that the United States has the capacity to sell up to $700 million in pork to China this year based on ractopamine-free production systems that are now available.
The Chinese currently have H1N1 and ractopamine restrictions on U.S. pork imports. If the country drops their H1N1 restriction, the question becomes how much U.S. pork could be supplied to them that is ractopamine-free? “The answer is a lot,” says Hayes. “We have many production lines that are ractopamine-free. In the short run, we could export a lot of pork to China because their prices currently are much higher than ours.”
Per capita incomes in China are rising at around 10 percent per year. “As a result of the rising income, the Chinese are becoming much more interested in having access to chilled, hygienic U.S. pork,” adds Hayes.
According to Hayes, pork exports to the China market will raise U.S. live hog prices by $9 per hog. That export surge could play a central role in the administration's National Export Initiative, which seeks to double U.S. exports in the next five years. NPPC will continue to work closely with the administration and Congress until China lifts its ban on U.S. pork products.