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JBS USA nixing ractopamine to capture Chinese pork demand

Company expands ractopamine elimination to its complete hog supply chain.

JBS USA is eliminating the use of the feed additive ractopamine in its U.S. hog supply chain in order to maximize export opportunities, JBS spokesperson Cameron Bruett confirmed to Feedstuffs on Monday. The decision will specifically allow the company to capture increased demand from China, which currently requires ractopamine-free pork imports, after the country’s hog herd has been decimated by the African swine fever (ASF) epidemic.

Bruett told Feedstuffs that the company eliminated the use of ractopamine from all of its internal live pork production systems in August 2018. However, it had not required the change of its contract farms.

“U.S. pork producers are among the most productive and efficient in the world. We are confident this decision will provide long-term benefits to our producer partners and our industry by ensuring U.S. pork products are able to compete fairly in the international marketplace,” Bruett added.

Smithfield Foods, which is owned by Chinese company WH Group and is the largest U.S. pork processing company, has already eliminated ractopamine from its whole supply chain. Jim Long, president and chief executive officer of Genesus Inc., suggested that Smithfield and JBS USA combined process 213,000 per day -- more than 40% of the total U.S. hog processing capacity.

Steve Meyer, economist for Kerns and Associates, said JBS USA has a capacity of 93,000 hogs per day, or about 24.18 million per year.

“They produce roughly 3.8 million hogs from their own operations, so this change would add 20.38 million head to national ractopamine-free output,” Meyer told Feedstuffs.

As part of his annual survey of packer capacity, Meyer recently estimated that about 44% of U.S. capacity is ractopamine free. The latest announcement from JBS would add another 16% to that number, putting the U.S. at 60% ractopamine free, he added.

Rabobank reported last week that China’s hog losses from ASF during the first eight months of 2019 will put the herd at approximately 50% of the year-ago level. The pace of the disease's spread has been slowed by government control measures and reduced farm numbers, which the report said will put total losses at 55% by year end.

According to Rabobank, pork production has declined more slowly than herd loss due the large liquidation during the first half of 2019. Rabobank expects a 25% decline in pork meat output for 2019, but given the decrease in sow numbers, production in 2020 is expected to result in an additional 10-15% drop in pork production.

TAGS: Feed Nutrition
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