On the early morning of November 6, 2024, Republican presidential candidate Trump announced his victory in the presidential election. This news is like a giant rock thrown into a calm lake, causing huge waves in the global economic field, especially for China's livestock industry, which has brought many uncertainties.
This article will analyze in detail the impact of Trump's presidency on China's livestock industry.
From historical data, in the first half of 2024, China imported $7.06 billion worth of oilseeds from the United States, including $6.99 billion worth of soybeans; Imported grains amounted to 2.065 billion US dollars, including 1.23 billion US dollars for sorghum, 450 million US dollars for wheat, and 390 million US dollars for corn; Imported feed costs 650 million US dollars, leather raw materials cost 240 million US dollars, tobacco and products cost 210 million US dollars, and dairy products cost 160 million US dollars.
It can be seen that the United States holds a certain share in the import of agricultural and livestock related products in China.
And in terms of livestock products, in the first three quarters of 2024, China imported $1.08 billion worth of beef and offal from the United States, a year-on-year decrease of 9%; Imported pork and offal worth 600 million US dollars, a year-on-year decrease of 27.7%; Imported chicken and offal amounted to 205 million US dollars, a year-on-year decrease of 67.8%.
These data reflect that the quantity of livestock products imported from the United States by China has shown a downward trend, but the United States is still one of the important suppliers of livestock related products in China.
Trump's threat to impose a 60% tariff on China is undoubtedly a bombshell that will have far-reaching impacts on China's livestock industry in multiple aspects
Firstly, feed costs will face significant fluctuations.
China's dependence on soybean and other protein feed is relatively high, and the United States has always been an important soybean exporting country.
Once Trump imposes a 60% tariff, the cost of importing soybeans from the United States to China will inevitably increase significantly.
Looking back at past trade wars, when China imposed a 25% tariff on soybeans originating from the United States, there was a temporary increase in domestic soybean and soybean meal prices. The proportion of soybean meal in feed formula is about 20%, and the usage is relatively large. Its price increase will directly drive up the price of pig feed.
Moreover, the imposition of tariffs has led to a price increase of 600-800 yuan per ton for imported alfalfa domestically, which undoubtedly further increases the cost of animal husbandry.
Based on a milk production of 30 kilograms and 3 kilograms of alfalfa grass, the cost of daily feed will increase by 3%. In addition, the prices of soybeans, corn, and similar domestic feed will rise, and the increase in daily feed cost will exceed 6%. This will have a huge impact on large-scale dairy farming enterprises in China.
Secondly, the import pattern of livestock products will undergo significant changes.
American pork has always been known for its low prices and holds a certain share in China's pork market.
However, after imposing a 60% tariff, the import cost of pork from the United States will significantly increase, and its price advantage will be completely eliminated, which will inevitably lead to a significant reduction in the quantity of pork imported by China from the United States.
For example, on May 16, 2019, in the same week that US President Trump announced tariffs on Chinese goods, Chinese buyers canceled 3247 tons of US pork import orders, the largest order cancellation in over a year.
With further increases in tariffs, this situation may become even more severe.
On the other hand, this will also prompt China to accelerate the pace of importing livestock products from other countries and regions to alleviate supply pressure.
At present, other pork exporting countries such as Russia and Brazil are actively expanding their pork exports to China, seizing the market share that originally belonged to the United States. China can take this opportunity to further expand its import channels and achieve diversification of livestock product imports.
Furthermore, the trade war will accelerate the industrial upgrading of China's livestock industry.
This may seem like a challenge, but it is actually an opportunity for China's livestock industry to achieve leapfrog development.
In the past few years, against the backdrop of trade frictions, China has actively expanded its import sources. The proportion of imported soybeans from the United States has decreased from 34% to 24%, while Brazil's proportion has increased from 53% to 69%. This not only reduces China's dependence on a single country, but also provides more choices for the development of China's animal husbandry industry.
At the same time, the trade war has triggered in-depth thinking on the transformation and upgrading of animal husbandry in China. The external dependence of China's animal husbandry protein feed supply has reached 75%, and the feed conversion rate is equivalent to 80% of developed countries. This indicates that there are still many bottlenecks in China's animal husbandry industry in terms of breeding efficiency, disease problems, environmental pollution, facilities and equipment.
The pressure of imposing tariffs will prompt China to increase its technological investment in animal husbandry, such as narrowing the gap with advanced foreign levels in high-end biotechnology such as gene editing, gender control, gene aggregation, and biological strain synthesis, and improving breeding efficiency and product quality.
Moreover, China is also striving to improve its pig farming technology. If it can reach the level of the United States, it will save at least 110 billion kilograms of grain every year.
In addition, the trade war has also driven China to develop efficient, environmentally friendly, and safe ecological breeding technologies to cope with the challenges of rising breeding costs and market competition.
However, we cannot ignore the many challenges that the imposition of tariffs has brought to China's livestock industry. The rising cost of feed, the increase in breeding costs, the decrease in expected profit margins, the limited growth rate of breeding scale, and the increased uncertainty of trade risks will all bring enormous pressure to the development of China's animal husbandry industry.
Especially for small and medium-sized farmers, their ability to resist risks is weak, and they may face greater difficulties under the impact of trade wars.
So, Trump's threat to impose a 60% tariff on China is both a severe test and a rare opportunity for China's livestock industry.
We should respond to challenges with a positive attitude, seize opportunities, accelerate the industrial upgrading and structural adjustment of China's animal husbandry industry, and promote the development of China's animal husbandry industry towards higher levels and higher quality.
Only in this way can we maintain the stable development of China's animal husbandry industry in the complex and ever-changing international economic situation, and make greater contributions to ensuring the country's food security and the people's living needs.
- Log in to post comments