BEIJING/CHICAGO/CARAMBEI, Brazil (Reuters) - Ken Maschhoff, chairman of the largest U.S. family-owned pork producer, has watched profits fall as trade tensions rise between the United States and China.
His company, The Machhoffs, has halted U.S. projects worth up to $30 million and may move some operations overseas. Investing in domestic operations now would be “ludicrous” as China and others retaliate against U.S. agricultural goods, Maschhoff said from the firm’s Carlyle, Illinois headquarters.
Across the globe, Chinese pig farmer Xie Yingqiang sent most of his 1,000-pig herd to slaughter in May to limit losses after Chinese tariffs on U.S. soybeans hiked feed prices and left him unable to cover his costs.
“It did not really make sense to keep raising them,” said Xie, from eastern Jiangsu province.
The dueling salvos of the U.S.-China trade war are landing particularly hard on the pork industries of both nations – and spraying shrapnel that has damaged other major pork exporters such as Brazil, Canada and top European producers. In contrast to many industries that trade war has divided into winners and losers, the world’s pork farmers and processors are almost universally shedding profits and jobs from a crippling combination of rising feed costs and sinking pig prices.
The key reason: The trade war came at precisely the wrong time, after a worldwide expansion to record pork production levels on the expectation of rising meat demand and low feed prices from a global grains glut.
In the United States, meat companies such as Seaboard Triumph Foods (SEB.A) and Prestage Farms have spent hundreds of millions of dollars boosting U.S. slaughter capacity by more than
