November 26, 2019

 

USDA tells exporters to disclose sales of swine and cattle carcasses amid increased swine purchases from China

 

The new rule by the United States Department of Agriculture (USDA) will give officials and traders a better insight into the rising demand for swine by buyers from China that has shaken the global meat market, reported Reuters.

 

According to the new rule published by the USDA effective immediately, exporters must report sales of swine and cattle carcasses as there is a lack of commensurate reporting with sales of swine to China increasing.

 

Previous USDA rules only stipulated exporters to report muscle cut sales. However, the new rule is unclear for traders as it doesn't specify different types of carcasses.

 

Analysts said China is purchasing whole swine carcasses from US companies such as Smithfield Foods, owned by WH Group as meat processors from China require an entire swine and not only certain cuts – with the African swine fever (ASF) outbreak affecting the country.

 

US meatpacker Tyson Foods said the new USDA changes will result in more transparency and remove confusion for the industry.

 

Weekly export sales data is published by the USDA, which can affect agricultural futures prices.

 

Dennis Smith, Archer Financial Services commodity broker in Chicago said previously, the data was incomplete due to carcass sales reporting uncertainty. Now with exporters required to report sales of whole, divided and boxed carcasses, it will provide a clear perspective for Chinese swine demand.

 

Smithfield Foods began shipping swine carcasses to China in June 2019 after one of its slaughterhouses was converted to slice swine into thirds, then boxed for export to China.

 

According to USDA data, 78,390 tonnes of swine were exported by end September 2019, significantly higher than the 676 tonnes exported in 2017.

 

The USDA said for markets to effectively function, agricultural export sales data must be timely reported and published.

 

China imposed high tariffs on US pork following the US-China trade war, but importers are willing to purchase from the US because prices in China have also increased.

 

-      Reuters