Headlines:
Trade War Puts the Hoof Into U.S. Pig Part Exports to China
Before the U.S.-China trade war, American pig processors exported nine out of every 10 pigs’ feet and heads they shipped overseas to China and Hong Kong – for prices higher than they would fetch anywhere else. Those parts and others that most Americans won’t eat – hearts, tongues, stomachs, entrails – have a special place in Chinese culinary culture and, consequently, in the profit margins of U.S. pork exporters. “You often hear that the products are what keep the plants running,” said Erin Borror, economist for U.S. Meat Export Federation, a trade group. The pipeline for these profitable pig parts, known collectively as offal, is closing fast after China slapped two tariffs on U.S. pork totaling 50 percent. That’s forcing U.S. processors to sell an increasing amount of such parts for pennies to be rendered into food for pets and livestock. U.S. shipments of byproducts affected by the duties fell by about a third in April and May combined, after China imposed the first 25 percent tariff on American pork in April, according to the latest data from the U.S. Department of Agriculture. On July 6, Beijing implemented an additional 25 percent duty as the world’s two largest economies slapped tariffs on $34 billion worth of each other’s’ goods. U.S. President Donald Trump has said the U.S. tariffs – which have provoked equivalent Chinese retaliation – aim to close the $335 billion annual U.S. trade deficit with China. The USDA declined to comment on the drop-in offal exports. Exporting pig offal to China has been a money-maker because consumers there enjoy its strong flavor. Stewed pigs’ feet with white beans, for instance, is a famous dish from Sichuan province, one of the country’s culinary capitals. At least one product exported to China has almost zero value anywhere else: hind pigs’ feet. Rear feet are nearly impossible to sell elsewhere because they have holes in them from where hogs are hung upside down in packing houses, which turns off consumers in other countries, said Dermot Hayes, an agricultural economist at Iowa State University. “They go from zero value outside of China to a significant value when the Chinese market is fully open,” Hayes said.
USDA Disaster Recovery Assistance Applications Now Open
China could open its economy if it wished, European Commission President Jean-Claude Juncker said on Monday, with the European Union calling on countries to avoid a trade war even as pressure mounts on Beijing over its industrial policies. Playing host to Juncker and European Council President Donald Tusk, Chinese Premier Li Keqiang stressed the need to uphold free trade and multilateralism as the United States and China become increasingly mired in a trade dispute, with no sign of negotiations on the horizon. U.S. President Donald Trump has warned he may ultimately impose tariffs on more than $500 billion worth of Chinese goods – nearly the total amount of U.S. imports from China last year – to combat what the U.S says are Beijing’s trade abuses.
Summary:
Short covering lifts Corn prices higher with the help of yield uncertainty from the hot and dry weather during pollination over the past couple of weeks. The Corn market closed higher but is still hovering close to recent contract lows. Cycles projection suggest that both Corn and Beans is possibly due for a low this week. Both Beans and Corn have been trading in an oversold condition according to their Stochastic indicators. Short cover also played a role in the advance in Beans. Like Corn concerns about potential yield loss from the recent hot and dry temperatures looks to make for some near-term price support. Wheat prices were stronger. The Winter Wheat harvest is drawing close to complete. It was 74% complete thru Sunday.
