When leaders from the U.S., Canada and Mexico convened in 1992 to sign the North American Free Trade Agreement, local pork producers figured trade opportunities soon would expand. Eighteen years later, they’re still waiting.
When leaders from the U.S., Canada and Mexico convened in 1992 to sign the North American Free Trade Agreement, local pork producers figured trade opportunities soon would expand. Eighteen years later, they’re still waiting.
“We have three free-trade agreements that have been pending since the Bush administration,” says Roy Lee Lindsey Jr., executive director of the Oklahoma Pork Council. “We think it’s vital for the success of our industry long-term to continue to expand those markets.”
When it comes to Oklahoma exports, the pork industry is the single-largest food item the state has, coming in as the No. 3 export overall. Aerospace parts and liquid pumps are Oklahoma’s top two exports.
Council statistics show 16,000 Oklahomans work directly or indirectly for the pork industry, which has more than 410,000 sows producing 8 million pigs annually. Nationwide, the industry exports 20% of its product, with pork topping the charts as the most widely eaten meat worldwide. The majority of Oklahoma’s exported pork is processed by Seaboard Foods in Guymon.
Lindsey says one of those still-pending agreements is with South Korea, and has the potential of earning Oklahoma producers an extra $11 per head. But like the others, he says the agreements have been bogged down in Washington.
“We were extremely excited when the South Korea free-trade agreement was done,” he says. “That was done in the Bush administration. We couldn’t get it to Congress. Then President Obama told us it had to be reworked. Instead of us being able to capitalize on no tariffs at a much sooner date, we would have to wait two more years in an effort to make the deal more palatable to the South Koreans.”
In April, U.S. Trade Representative ambassador Ron Kirk gave the Oklahoma pork delegation some good news, noting an agreement had finally been reached with Mexico. That was one of the deals NAFTA was supposed to take care of 18 years ago which would open U.S. roads for trucks to flow from Canada into Mexico.
Lindsey says the U.S. never lived up to its end of the bargain, and Mexico took the U.S. to World Trade Court.
“As an Oklahoma company, our goal from the beginning has been to develop export markets where we can add value to our existing pork products,” says Rod Brenneman, president and CEO of Seaboard Foods.
In the meantime, Lindsey says the industry also is feeling the pinch through rising corn prices. In recent years, the price for a bushel of corn has nearly tripled to close to $7.
“Corn prices are the single largest component in our cost to raise pork,” Lindsey says.
According to the USDA, 4.2% of this year’s crop will be left at the end of the year. It’s projected to be the lowest corn carryover since the Dust Bowl in Oklahoma, he says.
Prices are being pushed by the rising demand for ethanol fuel. Fuel mixers are mandated and paid government subsidies to blend ethanol into their fuels for the sake of efficiency.
“Corn is tremendously expensive to buy,” Lindsey says. “I don’t think we’ll run out of corn, and the economists will tell you the same, but it may be so expensive, you can’t afford it.”