Economist Forecasts Increased Pork Production In 2019, Despite Global Trade Disputes

Dec 5, 2018

Indiana, like the broader U.S. pork industry, has taken some hits this year with thanks to tariffs from China and Mexico on “the other white meat.”  This and other factors helped one economist make a 2019 forecast for national hog production.

Speaking Tuesday at a conference on the industry, Global AgriTrends President and CEO Brett Stuart tallied a list of all the taxes the U.S. currently pays to ship pork to China.

“China put a 25 percent duty on U.S. pork, then they put another 25 percent duty,” says Stuart. “So if we want to do the math, that’s 50 percent, plus we pay a 12 percent duty to ship pork to China, a regular duty, plus we pay a 16 percent VAT, value added tax. So you add that up, we’re paying 78 percent duties.”

American hog producers have also taken a hit thanks to Mexico enforcing a 20 percent tariff on all U.S. hogs imported into that country.

Looking at next year, Stuart forecasts pork production will be up next year, along with consumer demand.

“Americans are going to eat a record amount of beef, pork and poultry in 2019. More than they’ve ever eaten,” says Stuart.

Yet, he says there will still be a surplus and to keep per capita value steady, about 20 percent will need to be exported to other countries, which he doesn’t think can be done.

“We can’t look to exports and say save us here when we continue to produce, produce, produce more pork,” says Stuart. “We just don’t export enough to keep up.”

He calucalates U.S. pork exports will increase, but not necessarily to China due to the ongoing trade disputes.

“I’ve got 2018 up 4 percent, I’ve got 2019 up 5 percent,” says Stuart. “But if you look close, look at the red line China/Hong Kong, I’m not giving them much. Now I may revise that if the duties come off this week.”

Hundreds of pork producers attended this year’s Midwest Pork Conference in Hendricks County.

Indiana ranks fifth in the country for pork production with about 3,000 hog farmers around the Hoosier State.