Trade a top issue as World Pork Expo gets underway
By MICHAEL J. CRUMB
DES MOINES- Pork industry experts said trade agreements with Colombia, Panama and South Korea are imperative for the U.S.’s industry to remain competitive and will likely be at the forefront of discussions when the annual World Pork Expo begins this week in Des Moines.
The event is touted as the largest pork trade show in the world and attracts more than 20,000 producers and industry professionals for seminars, exhibitions and breed shows and sales. The three-day even begins Wednesday at the Iowa State Fairgrounds.
Among the issues on producers’ minds are the free trade agreements that many believe are vital to the U.S. pork industry, though labor unions have been critical of the deals.
“Other countries are also drafting free trade agreements with these countries, and if we do not move on these agreement, we will lose trade we already have there,” said Doug Wolf, president of the National Pork Producers Council.
A study done by Iowa State University economist Dermot Hayes shows that the deals with Colombia, Panama and South Korea would add more than $11 to the price a producer gets for each hog and generate more than 10,000 jobs.
Hayes said in an interview Tuesday that some of that increased price would initially be passed along to U.S. consumers, but it would be fairly small. That’s because the biggest share of expanded imports would go to South Korea, where demand is high for different cuts of meat than are most popular in the U.S. Over time, the increase demand would be met by raised U.S. production, causing prices to level out, Hayes said.
If trade deals aren’t signed with the three counties, Hayes’ study shows the U.S. pork industry could be largely out of those markets in 10 years.
“It would be devastating,” said Wolf, a pork producer from Lancaster, Wis.
Neil Dierks, the council’s chief executive officer, said the agreements have been the subject of negotiations for more than three years.
“The sooner we get them implemented, the sooner we can do business with these countries and reduce the chance of another country coming in and dominating that market,” Dierks said, estimating that the deals would increase the value of an animal by 5 percent.
President Barack Obama’s administration has begun the process of submitting legislation for the agreements, but it’s not clear when Congress will get final versions of the trade pacts.
The AFL-CIO, among the nation’s largest labor organizations, has been highly critical of the trade pacts but hasn’t directly addressed agricultural aspects of the deals. In general, the organization believes such deals need to guarantee greater worker protections and should ensure labor in those nations has the ability to organize.
Another concern for pork producers is how this spring’s delayed planting will impact feed supplies for livestock.
The annual stockpile of grain – the amount carried over from year to year – is already a near-record low, and the late spring planting has increased worries that livestock producers may find it difficult to secure enough feed for their animals later this year and in 2012.
“The carry-over has been lowered all the time, now to historical lows, and what that’s done is put a real emphasis on this year’s crop production,” Wolf said.
The U.S. Department of Agriculture had issued an earlier projection that 92.2 million acres of corn would be planted this year but with the wet spring and flooding across parts of the corn belt, some expect that figure to be lowered.
“That would have given us an even carry-over with this year but we all know that’s not going to happen,” Wolf said. “With flooding and deadlines we know there will be some that will not be planted.”
Wolf said decreased feed availability this fall could lead to moves to reduce more sow herds.
Dierks said the increased demands placed on corn, from fuel to increased exports, stretches thin the available supply for feed.
“All indications are we’re going to have tight supplies at the end of this summer, but if there is a significant reduction in available corn, there will be even tighter supplies in 2012,” he said.
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