If proposed tariffs come into fruition and a trade war follows, it could have consequences on not only the U.S. broiler and turkey industries, but nation’s the pork and beef industries as well.
Len Steiner, founder and principal of Steiner Consulting Group, talked how about U.S. President-elect Donald Trump had floated the idea of 25% tariffs on Canada and Mexico while speaking during the webinar, “2025 Economic Outlook for Meat and Poultry,” held December 10 and hosted by the Meat Institute.
“I think that’s a very important thing to watch for anybody in the meat business in the United States,” said Steiner.
“If they get into a tariff war, you might think you’re protecting your internal industries that way, but when the other side raises a tariff, then you’re going to hurt anybody in the export business. … Some of these policies sound good when they’re making a speech, but they have a long tail on them with unintended consequences.”
Steiner noted that because the United States is a low-cost producer in the world for broiler meat and turkey meat, it is a net exporter for those two animal proteins. He described the U.S. pork industry as having “mostly a two-way trade,” while the U.S. is a net importer of beef.
But if a trade war ensues, that is likely to affect trade of all of those meats, and that could mean a decrease in demand for the products, and a subsequent reduction in prices.
“(Imagine) if you show up at a banquet or a family dinner at a restaurant, and there’s 10 people at the table and everybody eats, then the chef comes out and says ‘I’ve got an 11th plate of food here.’ Well, that price for that plate of food is going to go down substantially because nobody wants it, and that’s a potential risk as we move forward here, if we get into a tariff war with the rest of the world, because the U.S. is a net exporter of meat.”
Chicken
Steiner said Mexico is a major destination for U.S. chicken exports, but that could change, depending on the tariff situation.
He said if a trade war between the two countries, “I’m sure Brazil is willing to step in to help them out.”
Brazil is already the world’s largest exporter of poultry.
Turkey
Because turkey is so efficiently produced in the United States, it imports hardly any turkey. But the U.S. turkey industry does benefit from exports, and most of those exports go to Mexico.
“Roughly 76% (of U.S. turkey exports are) going to Mexico, so it’s a big deal for our turkey industry,” Steiner said.
Pork
While Steiner said the U.S. imports a mostly equivalent amount of pork as it exports, he said most of the imports come from Canada. Canada typically ships a significant number of hams to the United States for consumption at Christmas.
Mexico, on the other hand, “is a big Kahuna for pork exports,” Steiner said.
“If we get into a trade war with Mexico, and they raise tariffs to slow down some of that flow, it’s going to be a problem for the pork industry, especially for anything in the ham industry. The biggest product the buy is probably hams. It could be a big headache,” he said.
Beef
Steiner described Canada and Mexico as the United States’ two biggest trading partners concerning beef.
And while he describes the trade between the U.S. and Canada is mostly one that goes two ways, the dynamic could change with a change in the tariff situation.
“Cattle are born in Alberta, processed there, and then a lot of that meat goes down to California, while a lot of meat that’s consumed in Toronto and Montreal originates in the United States and moves north, because of the size of the country and where their cattle are,” he said.
Other topics covered
Also during the webinar, Steiner spoke about the potential impacts of the U.S. getting more strict concerning immigration, as well as recent processing plant closures and if more can be expected. A separate article on those topics appears on WATTPoultry.com.
