Hosted by the Canadian Pork Council (CPC), the July meeting was attended by officers of the CPC, the National Pork Producers Council (NPPC) of the United States and the Mexican Pork Producer Organization OPORMEX.

The discussions included talks on animal care and health issues, while producers also reaffirmed their commitment to collaborate on efforts to reduce the risk of animal diseases, such as African swine fever.

“This was an opportunity for pork industry representatives to exchange ideas, discuss mutual challenges and possible solutions, and explore areas of common interest,” said CPC chair and meeting host René Roy in a July 15 press release.

This includes adoption of new methods for the best possible care and handling of our pigs, environmentally sustainable use of natural resources and to achieve favourable quality, safety, affordability and availability of pork products, added Roy.

“The North American pork industries — including both producers and pigs — are strongest when we collaborate, share challenges and solutions, and learn from one another,” said NPPC President and Ohio pork producer Duane Stateler.

“North America is more than just a trading bloc responsible for almost 50 per cent of international pork trade. From an animal health perspective, it is a strategic region with great potential to continue supplying global demand,” said Heriberto Hernández Cárdenas, president of OPORMEX.

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North America’s hog industry is grappling with multiple issues these days, but is presently feeling better than some of the other livestock industries. That doesn’t mean that everything’s great, but not yet having to deal with avian flu infections is keeping hog farmers in a cautiously optimistic mood about their challenges.

Top of the challenges this year, as it was last year, is the impact of Proposition 12, the California law that tightly restricts how much room each gestating sow is required to have in a barn, an amount that only a minority of the North American sow herd can satisfy. According to the National Pork Producer Council’s Brian Humphreys, California pork consumption has fallen 20 per cent while prices have risen 20 per cent.

“This is hitting people back in the state of California,” said Humphreys.

It isn’t just a California situation. Numerous states are considering their own laws to control the gestation spaces for pigs that end up on their states’ grocery store shelves.

Humphreys said farmers aren’t sure what to do. Some states have no set requirements. California has its specific rules. Other states might producer a hodgepodge of rules and regulations.

“How do you separate (pigs) within a barn?” posed Humphreys.

Producers are anxious about the outbreak of H5N1 in poultry and dairy herds, worried that they could see the same species jump that has afflicted dairy herds.

Farm Bill expectations are also top of mind for American producers, but since I get very confused by all the complexities of the Farm Bill, I’m not going to say anything at all about it until I figure it out.

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The rule, proposed last March, is a victory for U.S. ranchers who argued for years that use of the voluntary label by companies who raised animals abroad and only slaughtered or processed them in the U.S. was misleading and disadvantaged domestic producers.

“This final rule will ensure that when consumers see ‘Product of USA’ they can trust the authenticity of that label and know that every step involved, from birth to processing, was done here in America,” said Agriculture Secretary Tom Vilsack in a statement.

Vilsack announced the final rule to cheers at the annual meeting of the National Farmers Union in Scottsdale, Arizona.

“The abuse of the ‘Product of U.S.A.’ label stripped America’s cattle producers of a vital opportunity to market their USA beef while denying consumers the opportunity to support them,” said Joe Maxwell, co-founder of the farm group Farm Action, in a statement.

Producers using “Product of USA” or “Made in the USDA” labels will need to comply with the rule by Jan. 1, 2026.

Canadian concerns

The Canadian meat sector has been concerned about the change in labeling practice could have on meat and live animal exports to the U.S.

The Canadian government said that country of origin labeling would run contrary to shared goals of reducing inflation, improving food security and building resilient supply chains, it said in a submission during consultations on the U.S.’s country of origin labeling rules.

Canada has argued that supply chains operating under the proposed rules will have to segregate Canadian and U.S. animals and products. This would be costly and inefficient and discourage companies from using Canadian inputs.

A similar rationale led to the downfall of vCOOL’s mandatory predecessor, struck down in 2015 following a World Trade Organization challenge that ruled in favour of the complainants, Canada and Mexico.

The new proposed rule could also harm U.S. producers, the Canadian government said.

“For example, in recent years, there has been an increase in live cattle exports from the United States to Canada due to feedlot capacity expansion in Canada, higher processing volumes, and strong demand for beef,” the submission read.

“Under the new proposed rule, if an American rancher sends an animal to a Canadian feedlot, by virtue of availability, proximity, or economics, that is then sent back to the U.S. for slaughter and processing, that product would no longer be allowed to bear a ‘Product of USA’ claim.”

–With files from the Glacier FarmMedia network.

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The company, which reaped big profits as meat prices soared during the COVID-19 pandemic, has since confronted a decline and slowing demand for some products. Tyson has announced the closures of six U.S. chicken plants in about the past year and also laid off corporate employees.

The pork plant employed about 1,200 people in Perry, which has about 8,200 residents and is located near the state capital Des Moines, Mayor Dirk Cavanaugh said.

“It’s a big blow to the community,” he said by phone. “It’s our largest employer in the area. It’s going to be tough to figure out what to do without them.”

Cavanaugh said the plant is set to close on June 28.

Tyson did not respond to questions about the number of employees there but encouraged workers to apply for other jobs within the company.

“While this decision was not easy, it emphasizes our focus to optimize the efficiency of our operations to best serve our customers,” the company said.

Tyson’s pork business had an adjusted operating loss of $128 million in the fiscal year that ended on Sept. 30, down from income of $198 million in the previous year. Its sales volumes fell 2.2 per cent while average prices slid 7.9 per cent.

The plant in Perry slaughters about 9,000 pigs per day, said Steve Meyer, chief livestock economist for Ever.Ag. That accounts for a little less than 2 per cent of total U.S. pork production.

In December, Smithfield Foods said it would end contracts with 26 hog farms in Utah, citing an industry oversupply of pork and weaker consumer demand. Smithfield in October said it would shut a pork plant in North Carolina, after previously confirming it would close 35 Missouri hog farm sites.

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Proposition 12, which requires pig confinements to be large enough for animals to turn around, was passed by ballot initiative in 2018 and was upheld by the U.S. Supreme Court in 2023.

The U.S. pork industry has said the law burdens pork producers and would not improve animal welfare. It has called on Congress to repeal Prop 12 through federal action.

The Canadian hog sector has expressed concerns that–as Canadian swine housing standards may not meet the letter of Proposition 12–it and similar laws will have negative effects on Canadian producers. Canadian producers export millions of pigs to the U.S. each year.

The Biden administration had supported the industry’s position before the Supreme Court.

“If we don’t take this issue seriously, we’re going to have chaos in the marketplace,” Vilsack said.

“When each state has the ability to define for itself and its consumers exactly what farming techniques or practices are appropriate, it does create the possibility of 50 different sets of rules and regulations,” he said.

Prop 12 was fully implemented as of Jan. 1, 2024.

Economic effects muted

Earlier this year, agriculture economist Dan Sumner from the University of California Davis agreed with Vilsack’s assessment that state-specific regulations could complicate the sector.

“It becomes a real mess and then it starts to really have national implications or North American implications,” Sumner told a Jan. 10 agricultural outlook webinar organized by the North American Agricultural Journalists.

However, he suggested Proposition 12 would have minimal economic impact on the North American hog sector.

“California consumers like me are going to pay, I don’t know, five or 10 per cent more for pork that’s covered by the policy, which means a pork chop, but not a cooked ham or lunch meat or sausages,” Sumner said.

“This covers about eight per cent of the sows in North America. The baby pigs that come from those sows that comply are going to cost more. And then I, as a California consumer, will pay.”

“The other 92 per cent of the sows [or] the farms that raise those sows really won’t notice much,” he added.

–with files from the Glacier FarmMedia network.

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“No one will be spared the change in market pressures,” wrote Pam Lewison, director for the Washington Policy Center Initiative on Agriculture in a November policy brief.

“What those market pressures do to the overall higher cost of pork, however, won’t be known until the next marketing cycle after implementation,” she added.

Proposition 12, or “Prop 12,” was a California ballot initiative, passed in 2018. It said that meat and eggs could not be sold in California unless they came from animals raised in compliance with the state’s welfare regulations.

This includes foods imported into the state.

While egg and veal producers quickly fell in line, the policy brief said, pork producers—of which 99 per cent live outside California—challenged the law. This included taking the battle to the U.S. Supreme Court, which ultimately upheld Prop 12.

Pork distributors have until the New Year to submit third-party certification of compliance.

According to the brief, the hog industry estimates that the cost of retrofitting penning to comply with Prop 12 will be about USD $3,500 per sow. Proposition 12 specifies that each breeding sow much have at least 24 square feet of space, and have enough space to turn around, extend limbs, etc.

“For an average hog farm of 1,000 pigs, that represents a cost of $3.5 million,” Lewison wrote.

This with a projected average net cash hog farm income of $330,000 in 2023—down 28 per cent from 2022.

Pork producers have struggled this year with high costs in the midst of lowering demand and hog prices.

“Given the downturn in net income, the stark choice facing many small- to medium-sized farm owners may be to sell to larger farms,” Lewison said. “Consolidation in the meat production industry has long been a source of concern for producers, consumers, and even lawmakers.”

“Certainly, pork will become more expensive as both supply constricts and the actual cost of compliance is revealed,” she added.

Canadian concerns

The Canadian hog sector has been eyeing Prop 12 with concern. Canadian producers exported nearly 6.7 million hogs to the U.S. in 2022, including millions of weanlings.

The fear is that if Canada’s national swine housing standards don’t meet California’s regulations, American producers and processors may not want to purchase Canadian animals. However, there has been little clarity as to what the actual effects of Prop 12 will be for Canadians producers.

Also of concern is other states that have similar animal welfare laws in the works.

“We don’t negotiate separate trade agreements with 50 states. We need to be able to have a North American market that’s integrated, allows for the free flow of product and isn’t different in every different state,” said Manitoba Pork Council general manager Cam Dahl in a June interview with the Manitoba Co-operator.

The Canadian Pork Council has said its sees Prop 12 and similar laws as akin to non-tariff trade barriers and has pressed the Canadian government to take up the issue with the U.S.

In late September, the Canadian government told the Manitoba Co-operator it was analyzing the situation and, “considering the U.S.’ obligations under the World Trade Organization (WTO) and Canada-U.S.-Mexico Agreement (CUSMA).”

—Geralyn Wichers is associate digital editor of AGCanada.com. She writes from southeastern Manitoba.

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Chief Judge John Tunheim of the federal court in Minneapolis said the plaintiffs failed to show “parallel conduct” to support an inference that the companies conspired illegally.

The defendants included Hormel Foods, JBS USA, Smithfield Foods and Tyson Foods, among others.

Tunheim’s decision covered 13 lawsuits brought on behalf of three groups of plaintiffs.

These included ordinary consumers who bought pork at grocery stores or through other channels for their own use, purchasers who bought pork directly from the companies, and “indirect” purchasers who bought pork for commercial food preparation.

Lawyers for the plaintiffs did not immediately respond to requests for comment.

The dismissal was without prejudice, meaning the plaintiffs may amend their complaints.

— Reporting for Reuters by Jonathan Stempel in New York.

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U.S. President Donald Trump said it was possible the U.S. could reach a trade deal with China this week, as two-day talks were set to begin in Washington.

U.S. farmers and traders are paying close attention to the negotiations because China and Hong Kong were the second biggest export market for U.S. pork prior to the start of the trade war.

Shipments of U.S. pork to China declined after Beijing last year raised tariffs on imports from the United States to 62 per cent as part of the tit-for-tat trade war.

“Trump indicated a trade deal can still be done,” said Dennis Smith, broker for Archer Financial Services in Chicago. “This brought the hogs to life.”

June lean hog futures closed 1.45 cents higher at 90 cents/lb. at the Chicago Mercantile Exchange, after trading as low as 85.975 cents (all figures US$). July lean hogs settled up 0.225 cent at 90.975 cents, after touching its lowest price since March 15 at 87.85.

Traders remained nervous about the trade talks, though, because the United States is set to increase its tariffs on $200 billion in Chinese goods to 25 per cent from 10 per cent at 12:01 a.m. ET Friday. China is expected to retaliate.

U.S. farmers have been waiting to see whether China will further increase purchases of U.S. pork despite Beijing’s existing tariffs.

China will need to boost total imports to make up for tens of millions of hogs killed in an outbreak of the fatal pig disease African swine fever, according to analysts.

Yet China bought only 800 tonnes of U.S. pork in the week ended May 2, out of total U.S. export sales of 21,800 tonnes, the U.S. Department of Agriculture said on Thursday.

“They’re not coming to us right now to fill the gap” in supply left by African swine fever, a broker said.

CME June live cattle futures ended 0.875 cent higher at 111.95 cents/lb. August live cattle rose 0.2 cent to 107.6 cents/lb.

August feeder cattle advanced 0.6 cent to 144.475 cents/lb., while September feeder cattle closed up 0.425 cent at 145.275 cents.

— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.

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China implemented a 25 per cent duty on most U.S. pork items on April 2, and a 15 per cent tariff on a range of fruits and nuts, in response to U.S. tariffs on Chinese steel and aluminum products.

Last week it included both categories in a second round of tariffs to be imposed on July 6. No other products have been listed twice.

Pork now faces cumulative import duties of 71 per cent, not including value-added tax, according to a formula published on the website of China’s finance ministry last week. Cumulative duties on fruit amount to 50 per cent.

“The additional tariff will put us out of business,” said Zhong Zheng, founder of China-based Heartland Brothers, which sells U.S.-produced Berkshire pork to Chinese supermarkets and restaurants.

The U.S. shipped $489 million worth of pork to China last year, and had the biggest share of import volumes in the first quarter of 2018, at about 117,000 tonnes, according to Chinese customs (all figures US$).

But shipments have since ground to a near halt following the 25 per cent tariffs implemented in April, said U.S. meat analyst Brett Stuart, president of Global AgriTrends.

“They’ve pretty much stopped our pork,” he said.

Total duties on U.S. pork will reach 88 per cent from next month, after factoring in the 10 per cent value added tax, according to one industry expert’s calculation.

That comes as margins at some of the biggest U.S. pork processors reach their lowest level in three years, dragged down by surging hog prices and mounting worries over trade with China and Mexico.

With the new duties on U.S. pork, Chinese buyers will turn to other suppliers in Europe and Brazil, said Pan Chenjun, senior analyst at Rabobank.

Uncertainty, confusion

Compounding the pain, most in the industry were still unsure about how to calculate the new tariffs, leaving them unprepared for the impact.

“We’re trying to get confirmation of how the duties will be implemented and we have not been able to,” said Joe Schuele, spokesman at the U.S. Meat Export Federation on Wednesday.

The industry association represents firms such as Tyson Foods, JBS and WH Group’s Smithfield Foods.

Smithfield and Tyson declined to comment. JBS did not immediately respond to a request for comment.

The North American Meat Institute, an industry group that represents Hormel Foods and others, is also still waiting to learn the size of the tariff from the American embassy in Beijing or trade officials, said a spokeswoman.

Uncertainty about the size of the tariff makes it harder for meat packers to plan how much pork to process, said Bill Westman, senior vice-president of international affairs for the institute.

“When you’re planning your production process, you need some lead time and you need some certainty in the market to do it,” he said.

“That’s why there’s some hesitation here. Do we produce for the Chinese market when the tariffs may go up significantly July 6?”

Mark Powers, president of the Northwest Horticultural Council, who handles trade issues for apples, pears and cherries from farms in Washington, Oregon and Idaho, is also seeking confirmation from the U.S. government about how the tariffs will be applied.

Chinese customers had informed him on Wednesday that the latest tariff would replace the earlier one, he added.

A Shanghai-based produce company manager, who declined to be identified, said he believed the new tariffs would not be compounded on existing tariffs, and their inclusion on the latest list was a bureaucratic “oversight.”

However, he added that “the document itself is a bit vague so we can’t rule out this possibility, if the trade situation further deteriorates.”

Imposition of both duties would cause Chinese purchases to fall sharply, he said, and air-freighted cargoes of cherries currently on their way to China would be cancelled.

China is the third-largest export market for U.S. fresh cherries, according to the U.S. Department of Agriculture. U.S. exporters shipped $119 million of fresh cherries to China, just under a third of total shipments worth $605 million in 2017.

Apple and pear shipments would be even harder hit when the season starts this autumn as they face more competition from other markets, said Powers.

“These tariffs amount to some serious money and it makes it difficult to compete,” he added.

— Reporting for Reuters by Dominique Patton and Yawen Chen in Beijing and Tom Polansek and Karl Plume in Chicago; additional reporting by Stella Qiu.

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On Tuesday Mexico’s economy minister said that country will import more pork from Europe after placing a 20 per cent duty on U.S. pork in response to Washington’s higher tariffs on Mexican steel and aluminum.

“Trade issues are hanging over the market. Without that influence we’d have the July contract at 85 cents/lb.,” said Allendale Inc. chief strategist Rich Nelson.

June hogs, which will expire on June 14, closed up 0.425 cent/lb. at 78.575 cents. Most actively-traded July ended 0.5 cent lower at 79.45 cents. August finished 1.2 cents lower at 76.425 cents.

Thinly-traded June hog futures benefited from higher prices for wholesale pork and slaughter ready, or cash, hogs, said traders and analysts.

Packers are entering a seasonal decline in hog numbers as grocers purchase pork for spring grilling and June 17 Father’s Day meat advertisements, they said.

Mostly weak live cattle futures

CME live cattle closed generally weak, pressured by profit-taking and forecasts for increased supplies ahead, said traders.

They said firmer cash price expectations for this week underpinned the June contract.

“Most people are still holding the idea that this is a small bump higher in (cash) prices in the face of what will be a surge in numbers,” said Nelson.

June live cattle closed up 0.075 cent/lb. at 108.375 cents. August ended 0.425 cent lower at 104.15 cents. October finished down 0.025 cent at 107.15 cents.

Market bulls were encouraged by packers that raised bids for market-ready, or cash, cattle in the U.S. Plains on Thursday to $110/cwt from $107 earlier this week. Feedlots priced cattle at $115.

The bulk of cash cattle in the Plains last week fetched $110/cwt.

Cash cattle prices may have bottomed out after declines in recent weeks, a trader said. Retailers and restaurants may slow beef purchases after they fill inventories for Father’s Day, he added.

Profit-taking and weaker deferred live cattle futures pressured CME feeder cattle contracts.

August closed down 0.425 cent/lb. at 146.325 cents.

–– Reporting for Reuters by Theopolis Waters in Chicago.

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