By TIM ALEXANDER
Illinois Correspondent

SPRINGFIELD, Ill. — One of the first causes for optimism for U.S. pork producers came when China announced on Oct. 29 that it would lift its ban on U.S. pork imports. More good news arrived on Nov. 11 when USDA Secretary Tom Vilsack disclosed his decision to purchase up to $50 million in pork products to be used for various federal food assistance programs. Pork industry experts hailed both bits of news as a benefit to America’s pork producers, the U.S. economy, and those who rely on federal food assistance programs.
They are also regarding the news – along with other factors – as solid evidence the pork industry is beginning to rebound from a more than two-year downward spiral.

“I think these two (announcements) have definitely given the pork industry a glimmer of hope,” said Tim Maiers, director of public relations for the Illinois Pork Producers Assoc. (IPPA). “We’ve seen futures markets reacting a little bit, and we’ve seen some more positive prices. Looking out to June of 2010 we’re seeing some feeder pig prices coming back up to about $50 per head. We haven’t seen that level for a while.”

Along with National Pork Producers Council (NPPC) President Don Butler, Maiers called China’s decision to lift their ban on U.S. pork products a huge boost for pork producers and the U.S. economy. “China lifting their ban is definitely good news for the industry,” Maiers said. “When you look at China’s impact on the market, they are the world’s largest pork producer, as well as the world’s largest pork consumer. Last year, we had exceptional exports to China. Even if exports to China only account for one percent of all the U.S.’ pork production, it is still price-positive to get pork into China.”

According to the NPPC, the U.S. pork industry shipped nearly 400,000 metric tons of pork worth nearly $690 million to China in 2008, making it the third largest export market for the industry. However, 2009 sales of U.S. pork to China were down 50 percent from last year through the month of August.

The NPPC also found that since September 2007, the U.S. pork industry has lost $5.4 billion, with producers losing an average of more than $23 per hog marketed. Those factors made the USDA’s decision to make a third supplemental purchase of pork products – worth a total of up to $105 million – even more critical to the U.S. pork industry, according to Maiers.

“The announcement by the USDA to purchase more pork products is further good news to pork producers,” Maiers said. “The announcement will definitely help get some extra pork off the market. Aside from helping pork producers, the USDA’s purchase is going to help people in need just at a time when a lot of folks are struggling.”

Purdue University Extension Ag Economist Chris Hurt agrees that the U.S. pork industry may be ready to rebound from its prolonged slump. Hurt stated last month that the magnitude of losses from pork production operations is declining and profits are expected to turn positive in the spring of 2010. Greater demand for pork products will lead the industry’s resurgence, Hurt concluded.

Meanwhile, news of China’s recession of their ban of U.S. pork products and the USDA’s recent $50 million domestic pork purchase have sparked at least a short-term sense of optimism in the pork industry.

“The announcements gave the market some good news to react to, so that’s a good thing,” Maiers said.

“We’re not out of the woods yet, but I think there is hope for things turning the other way.”