China, Russia and Mexico’s Policies Threaten US Pet Food Exports
ATLANTA — According to the Commerce Department, U.S. dog and cat food exports hit record highs in 2021. Exports of these products jumped nearly 20% from 2020 to 2021, totaling $2.05 million last year.
However, the trade policy behind this sector is not perfect. Pending appointments to the U.S. Department of Agriculture (USDA) and Office of the U.S. Trade Representative (USTR), ongoing tensions with China and mitigating risks of African swine fever are all affecting the market for US global export, including that of pet food.
Keeping American pet food products competitive and accessible in the global marketplace is a priority of the American Feed Industry Association (AFIA). Gina Tumbarello, Senior Director of Policy and Trade at AFIA, shared a trade update for this sector at the organization’s 2022 Pet Food Conference on January 25, held in conjunction with the International Production & Processing Expo (IPPE) in Atlanta, Ga.
Main export markets
Canada remains the United States’ largest export market for pet food, followed by Mexico. While U.S. pet food exports to Mexico appear weak next to those to Canada, exports to Mexico grew significantly in 2021. According to Trade Data Monitor figures shared by AFIA, US pet food exports to Mexico grew 36% in 2021. The country imported approximately $119.3 million worth of pet food products to the United States from January to October 2021, compared to 101 .1 million dollars for the year 2020.
“I suspect there’s something going on in the industry,” Tumbarello said. “It might be an easier registration, less strenuous or time-consuming process to get the product to market, but it’s something on our list to figure out, because it’s a pretty big leap for Mexico. “
US pet food exports to Japan, Australia, China, South Korea, the Philippines, Colombia, Costa Rica and New Zealand also increased from 2020 to 2021. In this When it comes to pet food exports from other countries, China, Russia and Thailand recorded the strongest growth. in the first 11 months of 2021 compared to the full year of 2020.
“Chinese dog and cat food exports have actually increased by 31%, which I think is quite an interesting number, mainly going to European countries, Indonesia and a little to the United States as well. “, explained Tumbarello. “Exports from Thailand increased by 18%. Exports from Russia increased by 20%, mainly to EU countries and the former Soviet zone as well.
U.S. trade policy under the Biden administration differed from the previous administration in terms of climate policy, environmental impact and promoting social justice as a trade policy goal, Tumbarello pointed out. However, the administration has been slow to appoint an undersecretary for trade and foreign agricultural affairs at the USDA, to renew the Trade Promotion Authority – which helps the United States facilitate trade negotiations through Congress – and strike new trade deals, she said.
Katherine Tai was sworn in in March 2021 as USTR ambassador, but the legislature has yet to hold hearings to swear in Elaine Trevino, appointed by the Biden administration as chief agricultural negotiator with the USTR in September 2021.
“Agriculture is the shining star of the American economy,” Tumbarello said. “We don’t usually have a trade deficit like some other industries. So it’s a bit shocking to me, on the political side, why we are not focusing more, already a year later, on agricultural trade policy.
The United States is currently in trade talks with the European Union, Kenya and China, but no new agreements have yet been reached. The administration worked on the Indo-Pacific Economic Framework – which highlights trade opportunities with countries surrounding the Indian Ocean, including Japan, Thailand, Vietnam, Singapore, the Philippines, Indonesia, India. Australia, New Zealand and other countries – and set up advisory services. commissions on trade and environmental policy.
The ongoing trade war between the United States and China is “more important than agriculture,” Tumbarello said. We are two years into the phase one agreement between the two countries, and China is breaching some agricultural commitments it made under that agreement.
“We continue to have tariffs on imports from China, and China continues to have tariffs on imports from the United States,” Tumbarello said.
However, US pet food exports to China continue to grow under the phase one deal, but that growth is somewhat dependent on other trade war factors, Tumbarello suggested.
Under the phase one agreement, US facilities can now register to export to China instead of through the Hong Kong market, which has made it easier for US exporters to access the Chinese market. pet food.
“I think there is a lot of potential in China, all things being equal,” she added. “Another thing to note is with the increased tariffs, the increased pet food products to China, which are between 24% and 38% on US products, which is a tariff very high.”
In March 2021, Russia banned imports of pet food, animal feed, and animal feed ingredients from the United States. The United States exported approximately $2.8 million worth of dog and cat food products to Russia in 2020. Tumbarello shared that the United States’ trade relationship with Russia is “not improving” and is not improving. don’t expect to see much progress in this area.
“Here’s a great example of products being banned on the pretext that there are unapproved GMO events,” Tumbarello said. “I’m not aware of any evidence on this, but it’s a great example of what could happen with other countries like China banning products because they want to ban products and generally not respecting not the rules of the trade.”
Another potential threat is the phasing out of GMO corn in Mexico for human-grade foods. While this development may not necessarily affect the pet food space currently, Tumbarello warned that the country – one of the United States’ top export markets for pet food – could expand this restriction on GMOs at all levels to include animal feed containing GMO ingredients.
“The downward flow to our products would obviously be very detrimental,” she said.
African swine fever
African swine fever has yet to cross US borders, but the risk is being considered and monitored by lawmakers and animal feed organizations, including the AFIA. Tumbarello stressed the importance of staying ahead of the risks and potential consequences to ensure the exchanges run smoothly.
Currently, all pet foods containing animal-derived ingredients are exported with a 16-4 health certificate, which states that the United States is free of African swine fever and other animal diseases, Tumbarello explained. This involves pet food exports as well as other animal feed products.
“…Because our protocols are tied to this 16-4 provided when we export products to almost all of these countries, if we were to have an outbreak in the United States, we would no longer be able to check this box and say we are free from African swine fever, and we could not export on a 16-4.”
To address this risk, Tumbarello shared that the AFIA has worked with other industry groups to negotiate updates to these health certificates with key trading partners to separate pork and non-pork ingredients and avoid a potential halt to pet food and animal feed exports.
where do we go from here
To facilitate trade between the U.S. pet food industry and the global marketplace, AFIA continues to help industry partners navigate the export market landscape and challenges as they arise, including understanding regulatory requirements and registering products and facilities accordingly.
“We are developing how-to guides in a number of markets,” Tumbarello said. “Pet food will be included in some of these guides.”
Vietnam continues to be a key market opportunity for the pet food industry. AFIA is working to roll out social media campaigns nationwide to educate consumers about whole and balanced pet foods, as well as the health, safety and efficacy of pet food products. company made in the USA in general.
Tumbarello concluded his presentation by reiterating the importance of prioritizing trade policy to help US pet food manufacturers take the lead on the international stage.
“Agriculture and the pet food industry need agricultural leadership in this administration,” she concluded. “That will be key for us to move forward and continue to be globally competitive. It is important for us to resume negotiations, to continue to find ways to level the playing field internationally, to have better access to markets [and] reduce prices.
Keep reading our coverage of AFIA 2022 Pet Food Conference.