Fresh off the press at the Agcenter…
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"THE IMPORTANCE OF TRADE WITH CHINA
A trade agreement with China will occur for good reason. It is more important to the Chinese than to Americans. We export $179 billion dollars of goods and services to China while they export $557 billion dollars of goods and services to the United States. Their theft of our intellectual property is legend and other unfair trade policies must be stopped. One of the largest industries to be harmed is American agriculture.
The leading export product is soybeans necessary for feeding the enormous pig population that has been a staple for the Chinese diet. This is followed by cotton and skin and hides. Next, and due to rise in the near future is pork, to replace lost pig to the African Swine disease. Our largest pork company Smithfield is owned by the Chinese. Beef only represents 10% of Chinese red meat consumption but is fast growing. These ag products represents sales of almost $10 billion dollars.
The Trump trade wars have taken a toll on our beef exports to China. Hong Kong is the gateway for much of the beef moving to China and in the latest reporting period, our exports to Hong Kong were down 46% from prior year. This number helped set the stage for an overall decline of 6% in exports this year of our beef products. This comes at a time when we badly need excess supplies of beef to find an outlet abroad.
President Trump assured American farmers on Friday that he will establish new subsidies to help farmers weather the bad markets caused by Chinese retaliation. Beef producers were not mentioned as recipients of help but their markets are suffering proportionally large declines from lost sales to China. Any subsidy programs runs the risk of being gamed by participants. The government never seems able to design the programs to target the right groups at the right price.
The light at the end of the tunnel for beef producers has been the hope beef would replace some of the lost pork production in China. It is unrealistic to believe our pork producers can replace the enormous size of the disease losses in China. Beef prices are now under last year and would fit as a preferred option for Chinese consumers. The excess supplies of our beef also could contribute in a meaningful manner to increased preference for beef at the expense of pork in China as more consumers find compelling the taste and cost of beef.
The trade talks disbanded without progress but the need for an agreement remains and behind the scene discussions will set the stage for additional talks after the bluster has subsided and self interest prevails. Meanwhile our ag markets are being yanked around with the kind of volatility no one enjoys. "
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"THE IMPORTANCE OF TRADE WITH CHINA
A trade agreement with China will occur for good reason. It is more important to the Chinese than to Americans. We export $179 billion dollars of goods and services to China while they export $557 billion dollars of goods and services to the United States. Their theft of our intellectual property is legend and other unfair trade policies must be stopped. One of the largest industries to be harmed is American agriculture.
The leading export product is soybeans necessary for feeding the enormous pig population that has been a staple for the Chinese diet. This is followed by cotton and skin and hides. Next, and due to rise in the near future is pork, to replace lost pig to the African Swine disease. Our largest pork company Smithfield is owned by the Chinese. Beef only represents 10% of Chinese red meat consumption but is fast growing. These ag products represents sales of almost $10 billion dollars.
The Trump trade wars have taken a toll on our beef exports to China. Hong Kong is the gateway for much of the beef moving to China and in the latest reporting period, our exports to Hong Kong were down 46% from prior year. This number helped set the stage for an overall decline of 6% in exports this year of our beef products. This comes at a time when we badly need excess supplies of beef to find an outlet abroad.
President Trump assured American farmers on Friday that he will establish new subsidies to help farmers weather the bad markets caused by Chinese retaliation. Beef producers were not mentioned as recipients of help but their markets are suffering proportionally large declines from lost sales to China. Any subsidy programs runs the risk of being gamed by participants. The government never seems able to design the programs to target the right groups at the right price.
The light at the end of the tunnel for beef producers has been the hope beef would replace some of the lost pork production in China. It is unrealistic to believe our pork producers can replace the enormous size of the disease losses in China. Beef prices are now under last year and would fit as a preferred option for Chinese consumers. The excess supplies of our beef also could contribute in a meaningful manner to increased preference for beef at the expense of pork in China as more consumers find compelling the taste and cost of beef.
The trade talks disbanded without progress but the need for an agreement remains and behind the scene discussions will set the stage for additional talks after the bluster has subsided and self interest prevails. Meanwhile our ag markets are being yanked around with the kind of volatility no one enjoys. "
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