Published on 04/21/97

Sweet-and-Sour Pork: Taiwan Woes Raise Georgia Profits

An animal disease half a world away is already showing its effects to Georgia hog farmers.

"There's a great potential for U.S. pork exports to increase dramatically because of the Taiwan health problems," said John McKissick, a livestock economist with the University of Georgia Extension Service.

The 14 million-head Taiwanese swine herd is under quarantine because of foot-and-mouth disease. That prevents any farmer in the country from exporting live hogs or pork products. Taiwan supplies about half of Japan's demand for pork.

U.S. farmers have a chance to fill that void.

"If we were able to fill 5 percent of our production by exporting (to Japan), that would increase our prices by about $4 per hundredweight," McKissick said.

The increase could mean an extra $10 per hog for farmers. "That's a significant number to add to what appeared to be an already profitable price for most Georgia hog producers," McKissick said.

Of the U.S. hog herd, 5 percent is about 4.5 million hogs. On March 1, Georgia's hog herd was pegged at 800,000 head, down 11 percent from a year ago. McKissick puts the value of the herd at $66 million at any one time. Hogs brought the state's farmers $145 million during 1995.

Georgia hog farmers are looking forward to one of their first profitable years since the early '90s. Increasing world demand, fewer hogs in production and dropping farm and feed costs are brightening their profit picture.

"With the added increase in exports to fill the loss from Taiwan disease problems, we would expect to have an even more profitable situation," McKissick said.

U.S. hog farmers don't have to contend with foot-and-mouth disease. McKissick said efforts to control the disease eliminated it in U.S. hogs in the mid-1940s.

As prices to farmers rise, retail prices are likely to climb, too. "We would expect retail prices to go up some," he said. "But there is a very large margin between wholesale prices and retail prices."

That difference could buffer a retail price hike. As wholesale prices fell over the past few months, retail prices didn't drop the same amount, McKissick said. "So prices at the grocery store probably won't reflect the entire price increase farmers will see."

McKissick expects farmers will ride the Taiwan-induced price wave for a year at least.

"It does appear the quarantine will last a relatively long period -- at least a year and perhaps longer," he said. "Even if the quarantine is lifted, Taiwan will have a hard time recovering their pork export business."