As tariffs on US pork mount, cold storage facilities housing a glut of surplus pork are reaching capacity. In response to the Trump administration’s North American Free Trade Agreement renegotiation efforts, Mexico initially raised tariffs from zero to 10 percent in June of 2018. This month, Mexico increased the tariff to 20 percent. Similarly, China has increased tariffs on US pork imports to 62 percent, from the 25 percent imposed in April. While US demand continues to grow, it simply cannot keep up with domestic supply.
Pork producers are beginning to bear the brunt of these new tariffs. More and more, producers are diverting their supply to cold storage facilities like Arkansas-based Zero Mountain, Inc, which is reporting that they are now packed to capacity. Foreign companies, like Netherlands-based NewCold, are capitalizing on this new opportunity by building new storage facilities. Newcold has recently opened a state-of-the-art cold storage facility in Tacoma, Washington, and it now plans on building a $90 million dollar facility in Burley, Idaho.
Meanwhile, costs are mounting for pork producers nationwide. The US government has proposed bringing back a depression-era policy of borrowing up to $30 billion from the treasury to provide payments to producers that have incurred extra costs due to the imposition of tariffs. As these new tariffs redefine winners and losers in the pork industry, Gro Intelligence provides subscribers with up-to-date data and analytics on pork production and trade.