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Going whole hog: US tells exporters to report pig carcass sales as China buying soars
[CHICAGO] The US Department of Agriculture said on Monday that commodity exporters must disclose sales of hog carcasses, giving officials and traders more insight into a surge of Chinese pork buying that has roiled global meat markets.
China's pork imports have nearly doubled this year as a fatal pig disease has decimated its herd and pushed prices of the country's favorite meat to record highs. Its imports of beef and chicken have also climbed as China is seeking to replace millions of pigs killed by African swine fever.
The USDA published a rule to specify that exporters must report sales of pork and beef carcasses effective immediately because pork sales to China were rising and there was "an apparent lack of commensurate reporting," according to an emailed statement. The agency's Foreign Agricultural Service also received questions about whether carcass sales must be reported.
Previously, the USDA told exporters to report sales of "muscle cuts." Traders and analysts said it was unclear whether that included different types of carcasses.
China, the world's largest pork consumer, is buying US hog carcasses from companies like WH Group Ltd's Smithfield Foods because Chinese meat processors need the entire animal, not just certain cuts, according to analysts.
"Timely reporting and publishing of agricultural export sales data is key to effectively functioning markets," the USDA said.
The USDA publishes sales data each week that can swing agricultural futures prices. The data had previously been incomplete because it was unclear whether shippers needed to report carcass sales, said Dennis Smith, commodity broker for Archer Financial Services in Chicago.
Now, exporters know they must disclose sales of whole carcasses, divided carcasses, and those that are boxed.
"The rule is pretty clear now," Mr Smith said. "It'll give us a better perspective on the carnage in China - how much pork they actually need."
US carcass shipments to China began in June after Smithfield Foods, the world's biggest pork processor, retooled a slaughterhouse to slice hogs into thirds for export to China in boxes. Shipments reached a total of 78,390 tonnes by the end of September, according to USDA data, topping 676 tonnes shipped in 2017.
Smithfield did not respond to a request for comment.
US processors face a disadvantage for sales to China, compared with other suppliers, because Beijing imposed steep tariffs on US pork as part of the countries' trade war. Still, Chinese prices are so high that importers are willing to pay the tariff, affecting the US market.