If a trade war between the United States and China erupts, Tyson Foods CEO Tom Hayes plans to send unwanted pig parts to the rendering plant, reported Bloomberg.
Pig ears, for example, currently are exported to China where they are used in salads and other dishes. If those ears can’t be sent to China, American dogs and cats could get them after rendering.
However, Hayes hopes that trade with China remains vibrant, since selling animal parts for rendering yield a fraction of what they sell for on the Chinese market. Pigs ears sell for US$2.80 per pound versus approximately a dime for a pound from a US renderer, he said.
US pig product exports to China
China is the third largest export market for U.S. pork, according to United States Department of Agriculture data. American pig farmers exported 646 million pounds of pork to China in 2016, a 71 percent increase from 2015. Twelve percent of US pork exports went to China in 2016.
Mexico is the largest destination for US pork, poultry and dairy products by volume. In 2016, Mexico imported 1,604 million pounds of US pork. American pork exports to Mexico increased from 1,553 million pounds in 2015, a rise of 31 percent.
US pork exports to Mexico may decline along with peso
In January’s “Livestock, Dairy and Poultry Outlook,” USDA analysts warned that the declining value of the Mexican peso in 2017 could hurt US pork and poultry exports, along with other livestock product exports.
However, the dropping peso could be offset by lower pork and poultry prices in the US, noted the analysts. Hogs are expected to be 15 percent lower in 2017. These lower industry prices may translate to lower prices at retailers and help maintain exports to Mexico, regardless of the value of the peso.
As Donald Trump's campaign threats of a trade war with China loom over American industry, executives are left to determine how they might navigate that conflict. For the U.S. meat industry, the answer might be snoring softly next to the food bowl in your kitchen.