Tariffs on China Hitting US Farmers, Too

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Pigs at farm near Fuyang city in China’s Anhui province. Photo: AFP via Asia Times

A well-known saying declares there are two things you don’t want to know a lot about: sausage-making, and the process of legislating. Bordering on both those issues is this recent note in Politico,

China would not normally be able to satisfy its consumer demand for pork, even before the epidemic of African swine fever has cut the nation’s pig population in half. Farmers in the United States would, normally, step in to help fill the gap.

But in retaliation to the tariffs placed on Chinese imports by President Donald Trump, pork going to China from the U.S. now faces a 62 percent levy, essentially making American products too expensive for consumers in China. It’s also leaving exporters frustrated that they cannot take advantage of a prime opportunity to gain long-term access to a lucrative market.

American pig farmers are estimated to be losing out on $1 billion in exports as a result of the continued tensions between the two global economic powers.

Whether you agree or disagree with Trump’s tariff actions, you can’t deny that – for good or ill – he is legislating via financial penalties. In one sense, this simplifies the legislative process, in that it forces a change based on a single opinion, or point of view, as opposed to the accepted, ‘normal’ process involving debate between or among varying points of view.

As Politico notes, the use of tariffs relative to China and pig trade isn’t just hurting China – meaning, but not actually, the Chinese government: American farmers, and producers of pig-based products, are being hurt as well; More, from some perspectives.

Asia Times noted a few days ago that, “More than 1.1 million [Chinese] pigs have been killed or culled so far as authorities scramble to contain a [Swine flue] virus that emerged last year… for which there is no vaccine.”

And that’s just the official cull count, the Asia Times notes: “But the figure is widely believed to be much higher, as official data show China’s pig herd totaled 347.6 million in the first half of the year, down 60 million from the same period last year. Pork prices soared by a fifth in June alone.”

“The worst is yet to come,” Jan-Peter Van Ferneij, who monitors foreign markets at the French Pork Institute, said.

“For now it’s the numbers [of pigs] that are falling. Then it will be production … and consumption will fall,” he said.

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Reassure consumers

But swine fever does not affect humans, and butchers have been seeking to reassure consumers that their meat is safe in the country that produces and eats more pork than anywhere else in the world.

“Look at this blue stamp,” a seller at Beijing’s Sanyuanli market said, pointing to the seal from health authorities showing that the pork is safe. “Here’s the certificate that goes with it,” she added.

Standing in front of pork chops and ribs, Feng Shuyue recalled that people were “scared” of buying the meat last year when the epidemic spread across the country. “Today people are not afraid at all … because the [health] controls are very strict,” Feng said.

To meet demand, Beijing has increased pork imports, with shipments from the European Union rising 37% between January and April, according to European Commission figures.

Brazil has also become a big source of imports.

China is only importing frozen pork and the meat is going to larger cities, according to Jan-Peter Van Ferneij, who monitors foreign markets at the French Pork Institute.

Prices, meanwhile, could go up as much as 40% in the next six months, according to a note by Nomura bank.

Authorities have sought to reassure the public.

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Pork for sale at a wholesale market in Beijing. China is the world’s largest producer and consumer of the meat. Photo: Bloomberg

Earlier this month, agriculture officials said production was “slowly recovering”, with 44 new incidences of fever detected over the past seven months, compared with 99 from August to December last year.

But the malady is far from over. Another outbreak was reported earlier this week in southwest Sichuan province, with 21 pigs infected in a farm of 102 pigs.

 

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Supermarkets in Much Flux Some Places… But Not in Others

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Change has become so important to supermarket executives that it’s virtually a ‘product’ these days. Sadly, for some of us consumers, that’s lots more a fact elsewhere than in our neighborhoods.

I live in a small town (pop. <4,900) in Central Virginia. Two larger communities within an hour’s drive have populations of 42.8k and 76.5k.

My town has three food-shopping options: A Walmart, a Food Lion, and a locally-owned market. The larger communities have that same mix as well as an Aldi in each of them, a Lidl in one, several Kroger stores in the larger city, and a Fresh Foods-like (and also Amazon owned) Fresh Market in the latter.

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Supermarket Changes

Food Lion supermarket changes include aggressively updating many stores within the past few years – with few truly beneficial changes, from the average shopper’s perspective. (This seems to be an effort being done, understandably, in waves: Seven or so years ago, the effort was centered in Southside Virginia – in towns near or bordering the state’s border with North Carolina. Most recently, within the past two-three years, the focus has been on towns closer to the center of the state.)

Walmart supermarket changes locally most significantly have inluded, over the past decade, the ongoing addition of Pickup spots and expanded self-checkout areas. Lately, they’ve been adding security gates at entrances. The pickup spots are being welcomed by consumers as a great customer service – but not in my town: The store has an exterior labeled as the pickup area, but it is unused.

An assistant manager told me yesterday that the company is working in preparation of starting home delivery of food. But the evidence suggests they need to work first on getting existing home delivery programs, for other-than-food items, and delivery-to-store systems working as they’re supposed to: We’ve tried at least three times in recent weeks to get a specific (but hardly special) cat litter delivered — first to our door. Then, when we were told that couldn’t be done (after it had been, several times!), we tried arranging for a store pickup.

Delivery Issues? “It’s a Dot-Com Issue” At Walmart

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Yesterday, I was told the fact the reason the product isn’t available for pickup is “a dot-com problem; You need to call the headquarters number and talk to a dot-com rep.”

Walmart has also been subtly shifting its product mix – surprisingly, not always in the direction of healthier choices. But product-mix shifting is hardly a new ‘trend’ in food stores.

Too bad their local competitors don’t follow Kroger’s lead in this area: Not only have Kroger supermarkets changed to offering more healthy choices, it’s offering more variety, overall.

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And Kroger quality, particularly in fresh (prepared) foods, produce, meat, and seafood, is oceans ahead of all other stores in Central and Southern Virginia.

Another store where a fair amount of change has been – and is likely to continue – occurring is the Lynchburg Fresh Market. Like its compatriots in the Fresh Foods/Market family, this store has seen a fair amount of product shift since being taken over by Amazon. But not so much change as you might imagine: The product count has actually dropped, as in Fresh Markets elsewhere, and the prices have, while fractionally lower, remained at a level ensuring – unintentionally, one would hope! – that this is far and away the area’s most costly place to fill a shopping cart.

Food delivery services are beginning to catch on. Kroger is the first supermarket chain to join that fray, largely comprising, hereabouts, specialty restaurants, many oriented toward the sizable student community (Lynchburg is home to Liberty University, with a local student population approaching 45,000, and Lynchburg University, whose student count is less than half that.)

And, as noted, Walmart plans to offer food delivery “soon,” but shoppers hereabouts aren’t holding their breath: real, customer-friendly supermarket change at Walmart is more promise that fact.

Other traditional supermarkets more than likely won’t jump on this bandwagon, but Walmart has pledged to do so – with a clear focus, though, on other-than-food lines – over the next few years.

My town’s local supermarket – a fraction of the size, at less than 10,000 sq ft (929 sq m) – of the other two major food sellers – also has altered its product mix a fair amount in the last year, since being taken over, as an expansion, by the owner of a store in a nearby town. This company calls its stores ‘butchers’, but, truth be told, their meat offerings still fall short of their competitors’.

It’s produce offerings have been slightly upgraded, and the center-store mix no longer contains what was undoubtedly the widest, deepest offering of canned beans in (and well beyond) its trading area. (Why? “Our customers like beans,” a member of the staff before and since the takeover told us. Good enough!)

And the store’s meat offerings, customers say, have improved in… quality? quantity? Maybe a bit, in the former area, but certainly not in the latter: As is common in this area (except at Kroger), they refuse to stock lamb, stating “there’s no demand for it.” ‘Sounds like a chicken-vs-egg argument: availability-vs-demand, in this case.

An odd ‘feature’ of our local independent store is its refusal to stock beer. Stores sticking to that religion-based practice are fewer and further between these days. But this one’s customer base is skewed toward the older members of the community – the people more likely, traditionally, to be strict follow Southern Baptist traditions, alcohol-avoidance among them.

So even as change occurs to a shaking-things-up degree elsewhere, in some places, things largely remain the same.