This little piggy stays home

Illinois Pork Producers feel pinch of Trump tariffs as export markets close up and hog prices plummet

 The value of a lean hog has dropped by about a third just this year in President Trump's trade war. (Wikimedia Commons/Rictor Norton & David Allen)

The value of a lean hog has dropped by about a third just this year in President Trump's trade war. (Wikimedia Commons/Rictor Norton & David Allen)

By Ted Cox

Illinois hog farmers are feeling the pinch of retaliatory tariffs in President Trump's trade war as exports decline and prices plummet.

A look at the Nasdaq price chart for lean hogs over the last year shows the market price dropping from a high of about $85 a hundredweight early this year to $75 about a month ago to the current $56 — a loss of about a third of the value.

"We are seeing that the prices are definitely decreasing at the market level," said Jennifer Tirey, executive director of the Illinois Pork Producers Association. "It is hurting our farmers' bottom line."

The IPPA represents almost 2,000 farms that produce about 1.9 billion pounds of pork annually. It's the fourth-largest state in the nation in pork production, trailing only Iowa, North Carolina, and Minnesota, and it contributes $1.8 billion annually to the state economy, providing more than 10,000 jobs, as well as a market for corn and soybeans as feed crops.

Trump's trade war has helped reopen the U.S. Steel Granite City Works, but at a heavy cost to farmers, who've faced retaliatory tariffs from China and Mexico, two critical trade partners. According to Tirey, 26 percent of the Illinois pork industry typically goes to exports.

"The biggest thing to take away from the tariffs is just the fact that exporting is so critical to our industry as a whole," she added.

The biggest thing to take away from the tariffs is just the fact that exporting is so critical to our industry as a whole.
— Jennifer Tirey, executive director of the Illinois Pork Producers Association

Cutting off those markets — especially China, which Tirey said does a heavy business in hooves, snouts, and other "things that are not as popular here in the States" — means supply overwhelms demand and prices drop. And the pork industry works on a steady pipeline not unlike a factory.

"Most hogs are normally ready to go at about six months," Tirey said. "It's not a matter of waiting to hold your animals."

Independent hog farmers are feeling it worst, according to Tirey, as they deal with market drops. More established hog farms might have set deals with packers at a fixed contract, but that contract could be devalued in the next round of negotiations if the trade war persists.

IPPA has been working with the National Pork Producers Council to lobby Trump for relief. "They have been working closely with the administration to try to make some things understood and work through these tariffs as soon as possible," Tirey said.

In a speech in Granite City last month, Trump tried to pull farmers into the trade war on his side, saying, "China tried to hurt the American farmer because that way they would hurt me." He's proposed $12 billion in aid to help farmers — money, it's worth noting, that would have to be borrowed from China given the massive budget deficit Trump is running the government under following his tax cuts. Illinois Soybean Growers have rejected that, stating, "If trade is our problem, aid handouts are a bad solution." But hog farmers have been more receptive.

"We're still kind of waiting on details, how that's going to impact livestock," Tirey said. "But we're grateful to have any kind of aid.

"We're really looking for a more long-term solution," she added. "Not to say we're not supportive looking at this aid package, but we'd really like to see a resolution to tariff issues."

In the meantime, the association is looking elsewhere for new trade partners, Tirey said, adding, "Even if tariffs are resolved, it doesn't hurt to look into emerging markets."

Ted Cox