Trade Deals, USMCA Signal More Stable Exports in 2020, NPPC Says

The U.S. pork industry expects phase one of the U.S.-China trade deal to be a boon to pork exporters, although the industry has not been told exactly how much they will benefit, the National Pork Producers Council said. “The administration hasn't been sharing the details,” Nick Giordano, the NPPC’s vice president of global government affairs, said during a Dec. 18 call with reporters. “But our understanding is that it’s going to be very good for us.”

David Herring, president of the NPPC, said the council has been told the deal is “very positive for the pork industry,” especially because of China’s pork shortage due to African swine fever. “We don’t know any details at this time as far as numbers,” he said, “but we do know China has a huge need to replace the losses that they've incurred.” China is reportedly issuing tariff waivers for imports of U.S. pork more frequently due to the phase one deal (see 1912170030).

The Japan mini-deal (see 1912040008), the U.S.-Mexico-Canada Agreement (see 1912170063) and an improved outlook for trade with China are injecting optimism into the U.S. pork industry, Herring said, which started the year rapidly losing market access in Japan and pessimistic about trade negotiations with China. “Pork producers are operating in a significantly improved environment than the one we faced this time last year,” he said. China presents an “unparalleled opportunity” for export growth in 2020, Herring said, adding that the NPPC is also planning to target several Southeast Asian countries as export destinations next year, including the Philippines, Thailand, Vietnam and Indonesia. “Pork is the preferred protein in these countries,” Herring said, “and our growth opportunities are significant.”

The pork industry is also encouraged by the Trump administration’s early stance on a free trade agreement with Britain and the European Union. Although both Britain and the EU have rejected the idea of including agriculture in a potential agreement, Congress, the administration and industry representatives have said agriculture is one of its top priorities in any potential deal (see 1812110013). “We appreciate that this administration wants to include agriculture,” Giordano said. “Agriculture has got to be part of it.”

The pork industry expects the upcoming agreement with Japan, USMCA and a push for a deal with Britain and the EU to bring about a turning point for U.S. pork exporters, Giordano and Herring said. The NPPC expects the Japan deal to be implemented as scheduled on Jan. 1, 2020, and USMCA to be ratified soon. “We’re enjoying the momentum right now,” Herring said. “We don’t see any hiccups in the way.”

Giordano expects pork exporters to greatly benefit within the next couple of months, saying “we have absolutely no reason to believe we won’t.” The NPPC expects the industry to transition from “being whacked because of trade retaliation” to a more stable trading environment in 2020. “It’s not like things are fabulous for producers,” Giordano said, “but they’re certainly better than they were this time last year.”