Minnesota farmers get rare good news as China lifts ban on U.S. poultry

WASHINGTON – China on Thursday lifted its ban on imports of U.S. poultry, a move that restores a lucrative market for Minnesota's turkey and chicken sectors.

China ranked as the state's second-largest foreign market for turkeys and its third-largest export market for all poultry before January 2015, when the Chinese banned the purchase of U.S. birds after an outbreak of avian flu.

Now, a market that generated $15 million to $16 million a year in Minnesota sales will reopen.

In exchange, the U.S. has agreed to allow cooked poultry processed in China to be sold here. Minnesota-based Cargill is expected to do some of that processing at plants it owns in China, advocacy group Food & Water Watch said.

Cargill and Minnesota-based Hormel, the owner of Jennie-O turkeys, did not immediately respond to requests for comment on the new poultry policy.

U.S. Rep. Collin Peterson, D-Minn., chairman of House Agriculture Committee, cheered the news.

"This announcement is finally a step in the right direction, especially for the more than 1,200 poultry operations in my district," Peterson said in a statement. "It's something that I've pressed the [a]dministration over and over on … I hope the [a]dministration can also make progress on the other trade access issues within the Chinese market, end these damaging tariffs, and help our farmers expand and develop new export markets."

The reciprocal moves on poultry are largely seen as gestures of economic goodwill that could help current negotiations to end a trade war between China and the U.S.

"In diplomacy, you would call this a confidence-building measure," said Steve Suppan, a senior policy analyst at the Minneapolis-based Institute for Agriculture and Trade Policy.

Still, University of Minnesota trade specialist Tim Kehoe questioned the relatively small effect of the move in comparison to broader trade questions such as the Chinese theft of trade secrets and intellectual property from American businesses.

"This is good for poultry farmers, but it's not that big a deal [in overall trade negotiations]," Kehoe said. "Maybe it's a good sign [of progress] or maybe its just an attempt to make it seem better when they're not making progress on big issues."

International trade specialist Robert Kudrle of the University of Minnesota said that the poultry announcement comes in the wake of a recent speech by President Donald Trump that a trade-war truce with China may not be struck by year's end.

U.S. Trade Representative Robert Lighthizer and U.S. Agriculture Secretary Sonny Perdue praised the newly reopened poultry markets in a news release on Thursday.

Lighthizer called it "great news for America's farmers and China's consumers." He estimated that U.S. poultry farmers would be able to export more than $1 billion a year to China.

National trade groups representing the turkey and chicken industry applauded the restoration of trade, explaining that at their peaks, annual U.S. turkey sales to China totaled $71 million and chicken sales totaled $722 million.

An epidemic of African swine fever that has decimated China's pork supply may also be playing a role in China's desire to increase poultry purchases, said Su Ye, chief economist for the Minnesota Department of Agriculture. China "needs to make up for its loss of pork," she said, and may have to diversify sources of protein for its citizens.

While the restored poultry market profits Minnesota's nation-leading turkey producers, sales in the state's critical pork business remain hamstrung by tariffs placed by China in retaliation for Trump administration tariffs on Chinese imports. Although Ye said Minnesota hog sales to China are "sporadic," based on the supply in China, tariffs have shut down most pork sales in recent years, even as the Chinese lost millions of hogs to African swine flu.

For example, Minnesota hog producers sold roughly $65.5 million worth of pork to China in 2013 and more than $31 million in 2015. In 2018, they sold $54,000, Ye said, and roughly $2.2 million in the first nine months of 2019.

The U.S. decision to let poultry processed in China be sold in the U.S. also has caused safety and hygiene concerns among some U.S. activists.

"Chicken from China has historically been so unsafe that hundreds of dogs have died from eating treats derived from Chinese chicken," Wenonah Hauter, executive director of Food & Water Action, said in a statement. "Without stronger country of origin labeling, this deal will mean processed chicken products containing Chinese chicken do not have to be labeled."

Jim Spencer • 202-662-7432