A semi-truck rolls up to the loading dock at Twin Hills Colony once a week. The doors open and premium hogs stream in, 270 pounds at a time, until the scale hits 60,000.
The doors close. The truck lets out a gasp of diesel smoke and rumbles out of yard, southbound for the Independent Meat Co. packing plant some 390 miles away in Idaho Falls, Idaho, and eventually a freighter destined for Asia, where pork is king.
It’s been this way for at least 16 years, said David Hofer, of Twin Hills. Asian markets have been good business not only for this colony but for all of Montana’s Hutterite communities raising hogs. The farmers raise the animals exactly like their customers in Japan and China prefer, hormone- and additive-free with bright white fat marbled throughout the meat.
As the United States has ratcheted up tariffs on China at President Donald Trump’s direction, the Chinese responded with 62% tariffs on American pork, then later canceled orders. Other nations like Brazil are benefiting from tariffs jacking up the cost of U.S. pork into China.
Hutterites received the news in late July that the Asian markets would no longer support their current price. Hogs once destined for China are spilling into other markets, which creates an oversupply pushing prices downward. Hutterites have to take less money for their hogs.
“Our buyer says he’s had so much problems with the market over the water. He used to say he could sell anything there except the squeal, but these tariffs are getting tough,” David Hofer said.
The value of U.S. pork sales to the China/Hong Kong region was down 25%, or $110.4 million, for the first four-plus months of the year, the U.S. Meat Export Federation reported July 8.
It’s a tough spot for Hutterites. Alternative markets don’t put the same premium on the characteristics of the colonies’ pigs. They breed Yorkshire-Landrace females with Duroc boars to get the color of the meat just right.
They don’t use hormones or antibiotics. And they don’t use Ractopamine, a feed additive that takes the fat out of pork. In the lean-meat crazed U.S., where health professionals have warned against the dangers of cardiovascular disease associated with saturated fats, Ractopamine is the norm. In Asia, consumers have never surrendered the flavor of marbled pork for the tough, rubbery virtues of lean chops.
U.S. financial assistance to trade-war-troubled Montana farmers suggests the state’s pig farms have been punched in the snout by the China spat.
Hog farms dominate the top 30 Montana recipients of aid from the U.S. Market Facilitation Program, which was created by the Trump administration to offset trade-related market losses. The Environmental Working Group, a nonprofit government watchdog that’s made a point of tracking farm subsidies, obtained the data from the U.S. Department of Agriculture by plying the Freedom of Information Act. EWG received data for payments nationwide. It shared the Montana results with The Billings Gazette.
There were 64 payments issued to hog operations in 2018, totaling $1.77 million. The average payment for hog losses was about $50,000. Hutterites say they’d rather sell pigs into a favorable market than accept compensation from the U.S. Market Facilitation Program. There are a few payments to non-colony hog operations, but colonies dominate the list, just as they dominate the Montana pork industry.
All told, the $1.77 million in payments to pig farms are the tip of the trade bailout iceberg. Total payments to Montana farmers are $28.4 million so far. The payments, issued to 6,416 Montana farm operations, range from $117,007 to just $2.
Payments to wheat farmers, totaling $25 million, account for most of the Montana money. The amount isn’t surprising, given that Montana farmers planted 5.1 million acres of wheat this year. Montana is the third largest wheat state in the nation, according to the National Agriculture Statistics Service. Montana farmers receiving trade payments for wheat number 6,284. There are colonies receiving payment for wheat, as well. Seemingly anyone with at least 10 inches of rainfall and dirt grows wheat in Montana was paid about $308, U.S. Sen. Jon Tester among them. The smallest payment for wheat was $2. Cherry farmers split $242,578. The dairy industry, also dominated by colonies, split $308,000.
China was a problematic market before the trade war started, said David “Shorty” Hofer of the Midway Colony, near Conrad. There aren’t many surnames in the Hutterite community and Hofer is a common one in Montana colonies. Shorty Hofer of Midway Colony and David Hofer of Twin Hill Colony are different men. Shorty Hofer traces the troubles with China to January 2018. Buyers from China always seemed to be looking for some trait with the Hutterite hogs with which to be dissatisfied, a wedge issue.
By March of last year, Trump was threatening tariffs. But by summer, the threats turned into a full-blown trade war. It was good to have a head start getting out.
In addition to the trade war, China is now dealing with African swine flu in its own pig population. The disease is risky to pork producers everywhere. Many in the U.S. thought the swine flu would result in China increasing demand for U.S. pork, but it’s been hard to read the situation, Shorty Hofer said. China never fully discloses what its challenges are, or what its demand for foreign pork might be.
“China is looking for cheap pork. They want quality but not necessarily paying for the quality,” Shorty Hofer said. He favors business with the Japanese. “The Japanese, they’re paying for the quality and they’ll come back and buy again.”