China's Hitting the U.S. Where It Hurts: In the Pork Belly

[foamheart]

If you raise pigs commercially it sux, if you are in the US buying pork to process, not so much!

https://www.bloomberg.com/news/arti...u-s-where-it-hurts-in-the-pork-belly-jf37kne1

 

[SonnyE]

When North Korea detonates it's EMP nukes over us, China, and pork bellies, will be rather forgotten.
Besides, they prefer BBQ'd dogs. o_O

 

[zippy12]

Smithfield is a stones throw from my house and its china business owned a few years back. Sounds like this china man made a mistake buying US company. You can't fix stupid.

 

[HalfSmoked]

Looks like to me he has a loop hole can claim it's China owned and raise our local prices. No import or export here just screw you over deal.

Warren

 

[Medina Joe]

China's ravenous appetite for soybeans - the country's purchases hit a record last year and China eats up about 60% of globally traded soybeans - is because it needs to feed the world’s largest livestock industry including 400 million pigs, which in turn provides food for the world's biggest human population.
some statistics: Brazil supplied half of China’s imports last year while the United States shipped around 33 million tonnes, about a third of the total. It is replacing those U.S. tonnes that will be no easy feat, if not impossible: crops in Argentina, the world’s No. 3 producer, have been hit by a drought, cutting exports from there to less than 7 million tonnes in the 2017/18 season, its smallest in a decade, according to the U.S. Department of Agriculture. Outside of Brazil, the United States and Argentina, about 17 million tonnes of soybeans comes from a handful of countries.
Sales from Brazil would normally end around September and it’s usually U.S. beans between October to March. Where do we get beans from during that time if we only buy from Brazil?”

China just shot them-self in the foot.

 

[noboundaries]

Should be interesting to watch what happens to pork prices in the coming months.

Late last year, beef prices shot up by a $1/lb or more the week after China announced they were removing the restrictions on imported beef from the US. The restrictions had been in place since the outbreak of mad cow disease more than a decade earlier. Combine that higher demand with rancher stock reductions due to the drought in the Midwest, that has since ended, and KABOOM! High beef prices.

China's actions could be like a drought. At first, we experience lower pork prices due to lower demand while growers reduce stocks. Then BAM! China says, "Just kidding, we're hungry, send us your pork." Prices go through the roof. (If you didn't know, China has been expanding their large, corporate-type pork facilities. There's a reason they chose pork.)

Another scenario is pork producing corporations in the US might say privately in boardroom meetings, "American consumers are so stupid (which we're not). Let's raise prices 25% and blame China!"

Should be interesting to watch.

Fill your freezer now with pork butts and bellies, which BTW, will drive up prices due to higher demand, aka "The SMF Topic Effect on the Meat Economy," a little known watchdog group at the Securities and Exchange Commission.

 

[Medina Joe]

I agree. It should be very interesting to watch this unfold. We lost the trade war a long time ago. It time to just get back to even. They need us more then we need them.

 

[dls1]

Smithfield is a stones throw from my house and its china business owned a few years back. Sounds like this china man made a mistake buying US company. You can't fix stupid.

I'll disagree zippy in that I don't think the Chinese made a mistake when they bought Smithfield in 2013. The Chinese are the world's largest consumer of pork products and, year over year, the increase in the rate of consumption, also leads the world. Internally, for decades, Chinese pork production was made up of 1,000s upon 1,000s of small local mom and pop operations that could not keep up with the demand. The Chinese bought Smithfield, the largest pork producer in the US, not necessarily as a supplier of pork, but for their technology and knowledge of the processes involved in large scale industrial style pork production. In pretty short order, they've made some pretty giant strides as evidenced by the fact that the overall US pork exports to China have declined by 11% over the past 5 years.

Also, Smithfield exports pork products to over 40 countries, and only around 6% of those exports go to China. If their shipments destined for China are impacted by the tariffs they can easily pivot and redirect those shipments to other countries they currantly serve but are struggling to meet their demand