Saturday, May 25, 2019

Hog Wild


Trump’s trade war is causing pain among American farmers ... particularly soybean growers. China uses soybean meal to feed its hogs ... which are a major source of protein for its people. In response to Trump’s 25% tariffs, China has imposed retaliatory tariffs on US soybeans, among many other things, which would transfer much of this soybean trade to Brazil and Argentina.

But there is a rub ... as indicated recently by Secretary of Agriculture Purdue, China is in the midst of a devastating African swine fever epidemic which has killed as many as 200 million hogs ... or 1 to 2 times America’s entire pork output ... see: Washington Post Article. This suggests that China really needs far fewer soybeans than in times past ... but, if our trade war settles down, could import enormous numbers of slaughtered hogs.

So, if China were interested in feeding its people, American pig farmers could raise many more hogs for export and use our glut of soybeans to feed them. That is, if China were rational ... which it doesn’t appear to be.

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