Pork-industry leaders praise FTA expansion

2012-06-22T10:30:00Z 2012-06-22T10:36:59Z Pork-industry leaders praise FTA expansionBy Jeff DeYoung Iowa Farmer Today Iowa Farmer Today
June 22, 2012 10:30 am  • 

DES MOINES — As the United States continues to develop free-trade agreements (FTA), pork industry officials believe more of their product will continue to head overseas.

Laurie Hueneke, director of international trade policy, sanitary and technical issues for the National Pork Producers Council (NPPC), told producers at the recent World Pork Expo more FTAs could be on the way.

She said agreements with South Korea and Colombia were put in place this year, and an FTA with Panama should be implemented this summer.

Combined, those three agreements will increase pork exports by $770 million and are estimated to add $11 to live hog prices.

Hueneke said the United States is working with a group of nine countries to form the Trans-Pacific Partnership, an FTA that addresses tariff rates, among other things.

The real benefit could involve sanitary issues, she said.

“I really think the payoff is going to be in resolving some of those sanitary issues, such as trichinae risk and other requirements,” Hueneke said, adding more meetings are scheduled for July.

She said Japan has shown interest in the partnership.

“The Japanese ag sector is against it, while the majority of Japan is in favor of it,” Hueneke said.

Canada also has shown interest, but said concerns over the heavily subsidized Canadian hog industry may be an issue.

Trade discussions also are being held with the European Union, Hueneke noted.

She said Russia’s recent acceptance into the World Trade Organization (WTO) could help boost pork exports there.

“It’s mostly a tariff issue with Russia. Pork exports have been declining there since 2008.”

The biggest prize is China, the largest consumer of pork in the world, Hueneke said.

SHE ADDED there are several issues, including a ban on ractopamine, more commonly known as Paylean. China has been encouraged to re-assess the ractopamine issue, Hueneke said.

U.S. pork producers can offer the Chinese more bang for their buck, she said. The cost of production for a Chinese producer is $113 per hundredweight, compared with $63 for a U.S. producer.

“Their feed cost is pretty much the same as our overall cost of production.”

Hueneke said even a slight increase in exports to China would be a major gain for the U.S. pork industry.

“If we increase exports by one-quarter of a percent, that adds $3.72 per head in value. A half-percent adds $7.44 per head in value.

“If we would increase exports by 5 percent, that would increase value per head by nearly $75. This is potentially the largest market for the U.S. pork industry.”

Currently, nearly 28 percent of U.S. pork is exported, said Becca Hendricks, assistant vice president of international marketing for the National Pork Board.

In the first quarter of the year, she said pork exports were valued at $1.66 billion, 20 percent higher than a year ago. Pounds exported were up 8 percent.

Hendricks said exports added $59.52 per head in value in March. Some of that could be attributed to a foot-and--mouth disease outbreak in South Korea, she added.

DISEASE ISSUES are a concern to export partners, said Paul Sundberg, vice president of science and technology for the Pork Board.

He said one of the biggest concerns is the risk of trichinae. Sundberg said fewer than 0.3 pigs per million have trichinae in the United States.

“It’s a very negligible risk,” he said. “You can control it through freezing, but when that happens, you lose the (fresh pork) export value.”

Sundberg added trade partners have other concerns. Russia has a zero-tolerance policy for the use of tetracyclines and is threatening a ban on ractopamine, he said.

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