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October 25, 2014


Tom Philpott wrote an article in a now year-old edition of Mother Jones entitled “Are we Becoming China’s Factory Farm?” that I think worthy of commentary. I knew about and have blogged earlier on Chinese acquisition of Smithfield Ham, the North Carolina pork colossus, but that was from a viewpoint of foreign acquisition of American assets and whether such acquisitions were good for America. Philpott wrote on the enormous Chinese appetite for pork and some of the environmental problems we have both here and in China is meeting that demand, areas I did not cover in previous blogs.

I did not know, for instance, that Chinese consumption of pork has virtually doubled in the past twenty years and that they eat an astounding 88 pounds of pork per capita per year, far more than American per capita consumption of only 60 pounds (and falling). Chinese hog farms have multiplied but cannot keep up with domestic demand, partly because some 40 percent of China’s arable land is degraded by erosion, salinization or acidification, and another 20 percent is tainted by industrial effluent, sewage, excessive farm chemicals, or runoffs from mining activities. Such pollution makes soil less productive, and dangerous elements such as cadmium have shown up in rice crops. I note in passing that additional hog farms in China with their toxic residues can only make China’s already severe pollution problems worse.

China also has big problems with its rivers. The country has 1.3 billion mouths to feed and hundreds of millions of people to employ. Their rivers are being sucked dry as demand from farms and factories has overcome nature’s means of replenishment. Most of those that have not been sucked dry are severely polluted, one third of which are so toxic that they cannot be used to irrigate farms, per a study and report in 2008 by the Chinese government. The World Bank estimates, for instance, that China’s average annual water resources are less that 2,200 cubic meters per capita, compared with some 9,400 cubic meters of water per capita in the United States. (I again note in passing that the aggregate number of “per capitas,” like 1.3 billion people in China and 318 million in this country, may have something to do with that computation.)

So here is the problem. China’s imports of pork from the United States have surged unbelievably from 57,000 metric tons in 2003 to more than 430,000 metric tons in 2012 – and this was before Chinese interests officially acquired Smithfield Ham. They are limited by current pollution and more to come with new Chinese hog farms, and meanwhile, demand continues to surge, so what to do? Here is the answer: Raise hogs in the United States (while copying American factory farm hog raising industrial models at home and shooting craps with public health with the additional pollution).

While raising hogs in the United States for consumption in China may seem uneconomic, it isn’t. This is not slave labor for sale to greedy American multinational corporations; this is pork, and it is now (for various reasons) cheaper to produce pork in the United States than in China. Our Department of Agriculture reports that our meat industry delivers us hogs for about 57 cents per pound while China’s hog farms deliver hogs for 68 cents per pound, an 11 cent per pound differential. That may not sound like much money until you multiply it times hundreds of thousands of metric tons (and increasing), which will get your attention.

The sharp differential in price above set forth is largely explained by feed costs. China has little useable land that can be devoted to growing animal feed whereas, as noted by the USDA, “the United States has more abundant land, water, and grain resources.” So what is the next step in the Chinese solution? Import feed for factory scale hog-growing operations in China while putting American factory style hog-raising tactics in place, and who will supply such feed? You guessed it, the good old USA.

How much feed will be imported from the good old USA for both Chinese consumers and livestock? It defies the imagination. The Chinese and their hogs, chickens and cows gobble up an unbelievable 60 percent of the global trade in soybeans, and while their government has in the past limited imports of corn, Chinese meat producers are pressuring their government to import more. Given the huge and increasing demand for pork in China, I predict that the government will increase imports of corn, and who raises a third of the world’s corn? We do.

Both academics and Bloomberg Businessweek columnists report that Chinese consumers prefer American pork to Chinese-raised pork. They perceive that American pork is of higher quality than that raised on pollution-laced Chinese farms, and are willing to pay a premium price for it. Smithfield Ham imports are commanding premium prices in what appears to have been a good acquisition and investment for its new owners.

However, what is good for Smithfield Ham and other pork exporters to China may not be good for us: More mass-produced pork here means more pollution to air and water from toxic manure and more antibiotic-resistant pathogens, so in terms of ongoing and more intense pollution, it comes down to this: “Your place or mine?” Shall we have the mess up the Yangtze River or in rural North Carolina?

Further, if the Chinese ramp up corn imports from our country, then there will be more pesticides and fertilizers emptying into the Mississippi River Basin that will expand the dead zone in the Gulf of Mexico, already laboring under such toxic discharges that are making cesspools out of our oceans both in this country and around the world – so it’s a mixed bag, full of what economists call “externalities.”

So how much ecological pain are we willing to endure for the sake of trade and profit? Your call.   GERALD    E


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