2.5 Billion Pounds Of Meat Is Sitting In US Warehouses
U.S. warehouses are holding 2.5 billion pounds of meat, close to an all-time high, due to a surge in meat production and faltering demand, according to The Wall Street Journal Sunday.
“We’ve got too much capacity built in this industry if we’re not going to be exporting more product,” Ken Maschhoff, chairman of Maschoffs LLC hog-farming company, told The Wall Street Journal.
Many meat producers accelerated production as the economy improved in the U.S. and incomes increased in Asia and Latin America. Low prices of grain made it cheaper to raise livestock, also creating a boon to the industry. (RELATED: Chinese Soybean Tariffs Could Cost A Crucial Presidential State Big)
With China’s new retaliatory tariffs on pork, exports have slowed down — in the first five months of 2018, pork exports to China decreased 18 percent. Mexico also levied a 20 percent tariff on pork, and while exports have held steady for most of 2018, they are starting to decline.
The U.S. Department of Agriculture is looking at programs that would let producers borrow up to $30 billion from the Treasury to supplement price declines, according to The Wall Street Journal.
Pork isn’t the only meat tariffs are hitting. Canada, also fighting back Trump’s steel tariffs, imposed a 10 percent tariff on beef in July, Fortune reported Sunday. China raised beef tariffs to 37 percent in July, according to the Fortune report.
China is not currently a major importer of U.S. beef, however, it may have eventually become one. Beef exports to China could have increased to $400 million in the next four years, according to the Fortune report.
The tariffs may also accelerate the decline of beef exports to Canada. The U.S. exported over 250 billion pounds of beef and veal to Canada in 2017. That number was over 380 billion in 2013.
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