Surplus pork is biting US hog markets as trade war turns the world’s biggest customer away from American farmers

Trade concerns are starting to make all other factors in the hog market look obsolete.

Futures have tumbled to the lowest since March. That’s as African swine fever decimates China’s pig herd in an unprecedented global supply disruption.

Even though the Asian nation is importing huge amounts of meat, American producers are losing out to rivals in Brazil and elsewhere because of Donald Trump’s trade war. What’s more, the US president’s threat of additional tariffs is sparking concerns that a deal to end the spat is even farther away.

China just made its biggest-ever cancellation of American pork, scrapping a purchase of 14,700 metric tonnes, data showed on Thursday. US farmers had built up their hog herds in anticipation of more exports to meet that supply gap, but if trade tensions continue to run high, they could instead be facing a massive domestic glut.

“China is just fighting back -- they cancelled all that business, and that just has the market reeling,” said Dennis Smith, senior account executive at Archer Financial Services in Chicago. “We’ve got way too much pork if we cannot get a big export programme going.”

Hogs in Chicago tumbled 17 per cent in the week ended Friday, the biggest loss for rolling most-active futures since last July. Meanwhile, a measure of historical 30-day volatility is surging.