OVERISEL TOWNSHIP, Mich. (WOOD) — One of the largest pork producers in the nation is feeling the heat caused by the trade war between the United States and China.
China increased tariffs on U.S. farm goods in response to President Donald Trump’s decision to increase tariffs on goods coming from China into the U.S.
Dykhuis Farms in Overisel Township near Hamilton has some 250,000 pigs at any given time and moves half a million of them to market each year. President Joe Dykhuis said the trade war is certainly impacting the company’s bottom line.
“Trade news is affecting the price of pork on a daily basis right now,” he told 24 Hour News 8 Tuesday. “It’s emotionally and irrationally making the market go up and down as we have positive and negative news.”
The U.S. Meat Export Federation, citing numbers from the U.S. government, says China is the second largest importer of pork from the United States. The numbers show about $6.4 billion worth of pork was sent to China from the U.S. in 2018, accounting for 14% of pork exports.
Despite the tariffs, pork prices are on the upswing. Coincidentally, the trade war comes at a time when China is dealing with the spreading African swine fever. The disease has reportedly wiped out at least a third of the pigs in China, Dykhuis said. That should mean a significant rise in demand for American pork.
“China needs our pork now more than ever,” Dykhuis said. “One third of their pigs is more than all U.S. production combined.”
Dykhuis said the pain caused by the trade war has been felt for more than a year.
In addition to the issues in China, exports to Mexico, the largest importer of U.S. pork, have also been affected by tariffs and Trump’s decision to pull out of the Trans-Pacific Partnership has softened pork trade with Japan, the No. 3 importer of U.S. pork.
“Those three markets make up about 62 percent of pork exports,” Dykhuis said.
While the tariffs continue to impact Dykhuis’ profits, he said the short-term pain is worth it if the U.S. is successful in negotiating better trade agreements.
“You want to have good market access where you can compete with the rest of the world to provide them pork. We have not been afforded that opportunity historically,” Dykhuis said.
He says his message to the president on the topic would be simple:
“It’s painful but now is not the time to give in on whatever progress has been made,” Dykhuis said. “Win this thing fast.”