China halts some U.S. pork imports over feed additive use

CHICAGO Wed Aug 13, 2014 3:12am IST

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CHICAGO (Reuters) - China has barred pork imports from six U.S processing plants and six cold storage facilities effective on Wednesday to enforce its ban on the use of a feed additive that promotes lean muscle growth, the U.S. Department of Agriculture said on Tuesday.

China currently requires third party verification that U.S. pork shipped to the country is free of the additive ractopamine, which is sold for hog farm use under the name Paylean.

Pork packing plants now ineligible to export to China include Tyson Foods plants in Perry and Storm Lake, Iowa, along with the company's facility in Logansport, Indiana.

Other processors listed included a Hormel Foods Corp plant in Fremont, Nebraska, Triumph Foods in St. Joseph, Missouri. and Quality Pork Processors, Inc in Austin, Minnesota.

Tyson, Hormel and Triumph have not so far replied to requests for comment.

In 2013, U.S. pork exports to China totaled 312,138 tonnes, valued at $645.3 million, according to the Global Trade Atlas. Overall pork exports worldwide last year totaled 7.5 million tonnes valued at $20.4 billion.

"China is by far the world's largest pork producer and consumer. Therefore, it is really not possible to make projections about how certain events, such as plant delistings, will impact U.S. exports to China," said U.S. Meat Export Federation spokesman Joe Schuele.

Last week, Russia slapped a one-year ban on meat, including pork, from the West in retaliation for sanctions imposed for its support of rebels in eastern Ukraine.

Plants owned by Smithfield Foods, Inc [SFII.UL], a subsidiary of Chinese pork giant WH Group and a major exporter of Paylean-free pork to China, also found themselves drawn into the Russian meat ban.

Since early this year, two Smithfield plants have been the only U.S. slaughterhouses allowed to export pork to Russia, following a blanket ban on U.S. exports last year owing to ractopamine.

Chicago Mercantile Exchange hog futures for October delivery ended Tuesday's session down by a maximum 3-cents per lb daily price limit.

Futures' losses were largely attributed to lower prices of slaughter-ready hogs, pressured by softening wholesale pork demand and sufficient numbers of heavyweight animals, said traders and analysts.

Dan Vaught, economist with St. Louis-based Doane Advisory Services, said that while cutbacks in Chinese pork purchases were not supportive of U.S. market prices, the impact could be tempered by demand both at home and from other buyers.

"This has been an ongoing issue and doesn't seem likely to have that big of an impact given the persistent strength in domestic demand," he said, adding there was also continuing strong buying from four of the U.S. major export customers Japan, South Korea, Canada and Mexico.

(Reporting by Theopolis Waters and Meredith Davis in Chicago)

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