US Canada trade pork China insightGreat article
https://www.reuters.com/article/us-canada-trade-pork-china-insight-idUSKBN18W0GB which bodes well for Avivagen.
Hilites: That's a bonanza for Canadian farmers, who have almost completely removed the growth drug ractopamine from their pigs' diet - largely because it is banned in China, which consumes half the world's pork.
U.S. exports to China, by contrast, are limited because only about half of the nation's herd has been weaned off the drug, according to U.S. hog producers, meat packers and animal feed dealers.
But major U.S.-based firms are now moving to produce more ractopamine-free hogs - including the three biggest pork producers, Smithfield Foods [SFII.UL]; Seaboard Foods, a division of Seaboard Corp (
SEB.A); and Triumph Foods, a hog farmer cooperative.
That's the same year Canada's hog industry started to remove ractopamine, best known as Eli Lilly & Co (
LLY.N) product Paylean.
The European Union, which has long banned ractopamine, is China's top foreign pork supplier, sending 393,365 tonnes there in the first quarter.
Chinese authorities banned the use of ractopamine in livestock in 2002. They say meat raised with the drug can cause nausea and diarrhea in people and be life-threatening to sufferers of heart disease.
Hog farmer and rancher groups defend ractopamine use, saying it allows them to grow livestock more efficiently, with less feed, said Dave Warner, spokesman for National Pork Producers Council. Canadian health authorities also allow consumption of pork from hogs raised with the drug.
China became Quebec-based Olymel's biggest export market last year, vaulting over the United States and Japan. It plans to open a sales office there as early as next year.
"Just a tweak in that market can change the game for anyone in the world," Davies said.
GETTING PIGS OFF DRUGS
U.S. pork producers have moved more slowly than their Canadian competitors to raise ractopamine-free pigs, primarily because the United States is the world's third-biggest domestic market for pork.
Tyson Foods Inc (
TSN.N) and Hormel Foods Corp (
HRL.N) continue to process hogs that were fed ractopamine in part because they do not raise their own pigs.
Hormel's hog supply "comes from more than 500 family farms," a Hormel spokesman said, many of which use the growth drug.
U.S. firms can also send pork from ractopamine-fed hogs to Mexico and Japan, the top U.S. pork export markets.
But many U.S.-based suppliers are nonetheless scrambling to take advantage of Chinese demand for ractopamine-free pork.
Smithfield - the world's biggest pork producer and a subsidiary of Hong Kong-listed WH Group (
0288.HK) - has raised most of its hogs without the drug for more than two years, a spokeswoman said. As the top exporter of pork to China, Smithfield firm shipped 300,000 tonnes there from the United States and Europe last year.
The second- and third-biggest U.S. pork producers - Seaboard and Triumph - are jointly opening a pork processing plant next month in Sioux City, Iowa, where nearly all hogs slaughtered will be ractopamine-free, according to local hog producers and animal feed mills.
Building dedicated ractopamine-free pork plants allows processors to limit risk of China rejecting shipments that contain trace amounts of the drug.
Seaboard declined to comment about ractopamine. Triumph did not respond to requests for comment.
The Cooperative Farmers Elevator in Ocheydan, Iowa, is constructing a new feed mill that by 2018 will produce only ractopamine-free animal feed.
"It was requested from some of the customers we deal with," said Steve Peterson, the cooperative's vice-president of feed. "The one that is pushing the hardest is Seaboard."
U.S. hog producer Prestage Farms also is planning a new Iowa slaughterhouse for as many as 10,000 ractopamine-free hogs annually by 2018, president Ron Prestage told Reuters.
With the U.S. hogs in record supply, foreign demand is essential to profits, Prestage said.
"When we have plentiful hogs, as we do today, packers prefer not to have ractopamine," Prestage said. "They want to be able to export as much product as they can."