The trade war with China and low commodity prices will combine to slash U.S. farm exports by 4.5 percent this fiscal year, said the USDA on Thursday in a quarterly forecast. Exports of $137 billion would be the smallest since 2016, when exports bottomed out following the collapse of the commodity boom.
Pork producers will struggle through this winter with market prices below the cost of production, says economist Chris Hurt of Purdue University. "Record pork production and trade disputes continue to be the near-term drag on prices," wrote Hurt at the farmdoc Daily blog, adding that futures prices in the spring and summer "will be high enough to provide profitability."
The giant of world soybean trade, China, will slash its soy imports by 10 percent this trade year under the dual effects of trade war with the United States and an outbreak of African swine fever, said the U.S. agriculture attache in Beijing. At the same time, USDA data show a sharp decline in soybean exports to all markets and a trade group said tit-for-tat tariffs are putting pressure on pork sales to China and Mexico.
A decade ago, California voters rattled the U.S. farm sector and set off years of lawsuits by approving a referendum to give egg-laying chickens, sows and veal calves the room to stand up, lie down, turn around and fully extend their limbs. On Nov. 6, the electorate could do it again, this time by specifying how many square feet each animal would get and by banning the sale of meat and eggs from farms that do not comply with the rules.
U.S. farmers and ranchers were blindsided by the Trump trade war, but they will adapt quickly to lower commodity prices and disruptions in the export market, said Agriculture Secretary Sonny Perdue on Wednesday. “Farmers are smart,” he said, swatting down the idea that the White House will write another agriculture aid package after earmarking up to $12 billion for this year.
Hog farmers are headed for a money-losing year and a major factor will be the drying up of $1 billion a year in exports to China, says Purdue economist Chris Hurt. But Chinese consumers will feel little pain from the 25 percent tariff on U.S. pork because the EU and Canada are alternative suppliers. China acted sooner than expected with its weekend announcement of $3 billion of counter-measures on U.S. goods in response to President Trump's tariffs on imported steel and aluminum.
A case heard by the Iowa Supreme Court on Monday could have a dramatic effect on whether communities can sue factory farms that move into their neighborhoods. The case was brought by a group of community members against a pair of hog confinement operations run by Valley View Swine and JBS.
Nearly two dozen senators co-sponsored a bill that would exempt an estimated 100,000 large livestock farms from reporting emissions from manure and other animal waste. Sponsors include the leaders of the Senate committee that would handle the bill.
As trade relationships with China, Mexico, and Canada remain precarious, U.S. hog farmers are increasingly worried about the health of their export markets. Pork exports reached a peak of nearly $6 billion in 2017.
Hog farmers are sending more hogs to market this year, which ordinarily would pull down pork prices in the supermarket. That's not the case this year, according to USDA economists, because consumer demand for bacon is bolstering pork prices overall.