By Sid Salter
China is slapping heavy tariffs on chicken imported from the U.S. (including Mississippi products) in reaction to what the country’s Commerce Ministry claims is the “dumping” of chicken products on their markets at below-market prices.
Sure, some Mississippi firms were targeted in the tariffs – which will hit some companies with duties as high as 105.4 percent. Among Mississippi-connected firms, Tyson Foods got the lowest duty of 43.1 percent while Sanderson Farms in Laurel faces a 64.5 percent duty.
But that’s only part of the story.
Why are the Chinese hitting the poultry industry? Tires. They’re mad about U.S. duties on imported Chinese tires.
The new tariffs may close or impair a lucrative market for the Mississippi poultry industry – a market that is heavily based on the sale of chicken feet.
The new Chinese tariffs would put the price of U.S-import chicken feet at about 5 cents per pound more than the product of Chinese competitors.
Again, why does that matter in Mississippi?
A Dec. 7, 2009, story broadcast by Jason Margolis on Public Radio International’s The World captures in a nutshell why this development matters in Mississippi.
The story recounts the fact that in 2009, U.S. exports took a huge hit as a result of the world economic recession. U.S. Commerce Dept. trade analyst Heather Rank told Margolis that exports were down in 49 states – every state in the union except Mississippi.
Margolis reported: “That’s right. Mississippi, the state often depicted as economically troubled.
The state with the highest poverty rate in the country managed to out-do every other state when it came to exports. In the first quarter of this year, Mississippi exports were up 9 percent. That was more than 30 percent better than the national average.”
And what products was successfully Mississippi exporting? Energy products, vehicles, machinery, and poultry.
But it was poultry, Margolis discovered, that was driving Mississippi’s status as a successful exporter. Poultry exports last year in Mississippi were up 21 percent despite the down economy, due in great measure to trade with China.
Beyond exports, poultry production is a major economic force in Mississippi. The Mississippi Poultry Association speaks to the economic facts:
– Poultry is the largest agricultural commodity in the state and has ranked No. 1 in farm gate value for the past 13 years.
– The state’s poultry industry employs an estimated 24,606 people engaged in the production and processing of broilers and eggs. Wages and salaries paid to these employees totaled more than $1.07 billion. Economic activity generated in related industries accounted for another 23,585 jobs with payrolls of $729.5 million.
Chicken feet are a delicacy in China and China is the world’s largest export market for U.S. poultry. Tariffs on poultry threaten exports of Mississippi’s largest agricultural cash crop and they do so primarily for products that have more value in the U.S. as offal for rendering plants than it does for food – but mostly in that lucrative Chinese market.
Domestic consumption of poultry isn’t likely to increase significantly. So without Chinese trade, the likely result for Mississippi’s poultry industry is less production and lost jobs.
Contact Clarion-Ledger Perspective Editor Sid Salter, a syndicated columnist, at (601) 961-7084 or e-mail email@example.com.