The threat of a trade dispute with Mexico and the Russian announcement of a possible major reduction of imports of pork and poultry were reminders this week of the impact of world trade on US pork prices. At the current pace of exports, almost 25% of the pork we produce in the US will be in the export market this year. For the first 6 months of this year, exports accounted for 21.5% of all pork produced in the US. According to University of Missouri calculations, for the first 6 months of this year, exports contributed over $42 per pig to the value of our pigs at slaughter.
According to Steve Meyer and Len Steiner (www.dailylivestockreport.com) exports for the Jan-Jun 2003 period were 851 million pounds and represented 9% of US production. For the same 2008 reporting period, exports of pork products was 2.5 billion pounds, 21.5% of US production. In 2003, Russia and China/Hong Kong combined imported 0.5% of our total production. In 2008, these 2 countries imported 7.4% of our production, with Russia at 2%. Thus, the Russian announcement of a possible curtailment or at least major reduction in imports hinted at a major market impact.
All of this suggests that the long term financial well being of pork producers is more closely tied to world politics than ever before. With the +$40 per pig benefit of export trade comes the risk of the loss of this benefit at the whim of government policies that may or may not be related to animal agriculture.
On Thursday of this week I traveled with Larry Sitzman, executive director of the Nebraska Pork Producer Association. We did producer meetings in Bloomfield and Humphrey, Nebraska. At both sites, producers and allied industry friends that I worked with during my career as an extension swine specialist at the University of Nebraska asked for my ‘take’ on many of the political issues and their impact on the pork industry.
I think Larry explained it best when he responded to a question on the status of the free trade agreements that are in congressional hands for approval. While many of our Midwestern congressional delegations and senators support these agreements, there will be no votes in congress on approval of these agreements until next January at the earliest. Neither political party wants to cast a vote for or against any possible controversial bill as this vote may be used as ammunition in this falls political campaign.
All of this highlights what I have been talking with producers for years about – the successful pork producer of the future will have knowledge of global issues. Along with this knowledge will come the acceptance of the fact that successful producers will be involved in the political process. Successful producers will take the time to become familiar with their congressional delegation and become involved in letter writing, phone calls, etc. to keep the delegation informed about the impact of legislation on pork producers. Without involvement in the political process at all levels (county, state and US), pork production becomes an industry that has to take what ever is handed to them in the way of regulation, export opportunities, etc. With involvement comes the opportunity to be part of the process. The future of pork production in rural communities is to important not to participate.