CHICAGO (Reuters) – When Beijing announced it was exempting 16 U.S. goods from retaliatory tariffs, Chinese firms hurried to call Proliant Dairy Ingredients in the heart of American farm country.
Among the products included in China’s first batch of exemptions last month was whey permeate for animal feed, a dairy byproduct sold by Iowa-based Proliant.
Goodwill - Gesture - Talks - US-China - Trade
While seen as a goodwill gesture ahead of talks to end the U.S.-China trade war, the exemption from a 25% retaliatory tariff imposed last year is also a means for China to get supplies it needs. Whey permeate provides nutrients that can help baby pigs grow up faster and healthier as the world’s largest pork consumer fights African swine fever, a fatal hog disease.
China also exempted U.S. fish meal from a 25% tariff, another ingredient in piglet diets.
Exemptions - Demand - Products - Sales - Prices
The exemptions have increased demand for American products, but sales and prices remain depressed because African swine fever has decimated China’s hog herds.
“We got many calls the day of the announcement,” said Gabriel Sevilla, Proliant’s vice president of sales and marketing. “But the total amount being negotiated represents a very small percentage of the market.”
US - Feed - Suppliers
It is an amount U.S. feed suppliers hope to increase.
U.S. dairy companies and industry representatives plan to host two seminars in China this month to pitch permeate as a way to rebuild herds.
Research - Livestock - Producers - Amount - Ingredient
They will present industry-funded research to convince Chinese livestock producers to double the amount of the ingredient they use to improve piglets’ growth and health. China has traditionally fed piglets half as much permeate during their lives as U.S. and European hog producers, according to U.S. suppliers.
“If we’ve lost half of the pigs in China but we can get them to double the amount of permeate that they’re using, we can potentially keep the same volume demand as we had before,” Sevilla said.
Tom - Vilsack
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