Among the products included in China‘s first set of releases last month was the spread of whey for animal feed, a milk by-product sold by Iowa-based Proliant.
When Beijing announced it was exempting 16 US goods from retaliatory tariffs, Chinese firms rushed to call Proliant milk ingredients into the heart of the American farm country.
While seen as a gesture of goodwill ahead of talks to end the US-China trade war, exemption from a 25% retaliatory tariff imposed last year is also a way for China to get the supplies it needs. .
Whey spread provides nutrients that can help baby pigs grow faster and healthier as the world’s largest pig consumer fights African fever, a fatal swine fever.
China also exempted American fish food from a 25% fee, another ingredient in pork diets.
Exceptions have increased demand for American products, but sales and prices remain depressed as African swine fever has fooled China’s flocks.
“We have received many calls the day of the announcement,” said Gabriel Sevilla, vice president of sales and marketing Proliant. “But the total amount negotiated represents a very small percentage of the market.”
There is an amount of American food suppliers I hope to grow.
US dairy companies and industry representatives plan to organize two workshops in China this month to raise permeability as a way to rebuild flocks.
“If we have lost half of the pigs in China, but we can make them double the amount of permeate they are using, we can potentially maintain the same volume requirement as we had before,” Sevilla said.
American EXPORTS, PRICE DECLARATION
Tom Vilsack, chief executive of the American Dairy Export Council, also sought insight and whey for Chinese officials as a means of recovering from the outbreak when he visited China shortly before the exemptions were announced.
“I was constantly leading milk-winning solutions for the US and China,” said Vilsack, a US agriculture secretary who spoke with officials in China’s trade and finance ministries.
About 85% of the American permeate is used to feed the world’s pigs, contributing $ 5.6 billion to total US milk exports, according to suppliers. But U.S. penetration exports to China have fallen to less than 10% of production from about 30% before the trade war, suppliers said.
The decline has hurt profits for high-protein whey protein production, according to US food company Land O’Lakes, which sells cheese but does not directly export pellets.
“We expect an increase in demand for traversal with the tariff suspension, although we expect it to be tempered by the continued impacts of the ASF,” Land O’Lakes said, referring to African swine fever.
Prices for American escalation have halved to about 10 cents a pound due to illness and trade war, said Richard Bradfield, a vice president for the Missouri-based animal feed company International Ingredient Corporation.
Demand should increase by the second half of 2020 as Chinese farmers rebuild their flocks, said Qingping Liu, Asia company director. For now, buyers expect lower prices due to exceptions, Liu said.
“While North China’s demand catches some, South China’s demand is very weak with only 20% of the pigs remaining,” Liu said.
The death of millions of pigs is also curtailing US fish meal sales, according to Virginia-based producer Omega Protein, a unit of Cooke Inc. of Canada.
“While there may be increased interest now that China has excluded fish meal and oil, other factors still remain, such as African swine fever and high port stocks that we considered a challenge to boost sales for the Chinese,” spokesman Ben Landry said./Investing.com