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Chinese tariffs could thin margin line even more for pork

Purdue ag economist Chris Hurt tells Brownfield Chinese tariffs on U.S. pork could put some producers in the red.

He says while exports to China are not significant, the potential impact to hog farmers is estimated at a loss of $6 to $7 dollars per head.

“When margins already looked like they were going to be around break-even to a little bit of profit, this would shift that now to a loss situation overall for 2018.”

He points out other countries could make up for lost market-share, and it’s still possible the U.S. and China work out differences before the tariffs are enforced.

But with so much uncertainty around trade, Hurt cautions producers considering expansion.

“Let’s be conservative, Let’s take profits where we can have (them), let’s be somewhat diversified, and let’s avoid over-expansion.”

Pork producers are looking to grow herds as new processing capacity comes online.

The USDA Hogs and Pigs Report Thursday verifies that, with a 2 percent rise in the breeding herd and 3 percent increase in market hogs.