ESSEX — Hearing what you raise on your farm could end up on a plate thousands of miles away is one thing, Dennis Liljedahl says. Seeing it is entirely different.
Liljedahl, who runs a farrow-to-finish hog operation and farms near here in Page County, was part of an Iowa trade mission to China in March.
“It’s very eye-opening,” the Southwest Iowa producer says. “We saw U.S. labels on pork products, and the word was the Chinese trusted the safety of products made in the U.S.”
The trip was put together by the Iowa Department of Economic Development and the U.S. Meat Export Federation.
“It allowed many of us to get a firsthand view of how the markets work in China,” Liljedahl says. “We learned a lot about how the product comes into the country, and how it’s distributed once it gets there.”
He says most of the pork coming into China is put into cold storage. The process to move fresh pork through customs is challenging.
“They would prefer it fresh,” Liljedahl says. “But it’s very difficult.”
He adds the Chinese use a lot of the carcass that is not used in the U.S., adding more value to the pig.
It further illustrates the importance of trade, he says.
“About $50 of value for each pig comes from exports, and we are exporting 25 percent of the pork we produce,” Liljedahl says.
Trade concerns are increasing right along with meat production, says Dermot Hayes, an ag economist with Iowa State University.
He says as trading partners forge new agreements, the U.S. faces the prospect of being left behind.
“We walked away from TPP (the Trans-Pacific Partnership), and since then we have seen the European Union reach agreements with Japan and Vietnam,” Hayes says, adding Canada is also looking to create agreements with those trade partners.
U.S. pork production is estimated to be 5 percent higher again this year. Hayes says producers expanded because of added packing capacity and a bright trade outlook.
But now trade issues also abound with Mexico, he says.
“I’ve talked to people there, and it’s shocking how much they dislike our current president,” Hayes says. “If we decide to pull out of NAFTA, there will be two months spent trying to create a new agreement. I believe Mexico will spend those two months finding other trade partners.”
The economic hit to the U.S. would be significant it that happens, he says.
“We cannot face a duty of 20 percent or more to get products into Mexico,” Hayes says. “We would have to decrease our output 5 to 10 percent. What’s going on with NAFTA is truly scary.”
While he does not agree with President Trump on NAFTA, Hayes does agree with the president on recent tariffs imposed on Chinese products.
“I see the president’s logic,” he says. “We send $150 billion in exports to China, and they send $500 billion to us. They have the most to lose in any trade war, because it will damage their economy. I’m not as worried about China as I am Mexico.”
President Trump recently suggested he would be interested in becoming part of the new TPP pact. Hayes says many of the countries in the pact have expressed skepticism.
“What I’m hearing is the ministers would consider it as long as we don’t ask for changes,” he says. “It puts the president in a tough spot because he has called it the worst trade agreement ever. If we are lucky, they might let us in under the original terms. The president needs to do something to appease his ag base.”
Liljedahl says he and other livestock producers understand the importance of trade, adding commodity groups are continuously talking to Congress and other agencies.
“We just have to keep the message out there about how much product is going overseas,” he says. “We all understand the value added to our products through the export market, and we need to do what we can to keep it strong.”