I stopped at a Meijer grocery store over the weekend. Boneless, center-cut pork loin was on sale for a price I do not recall seeing for at least a decade: $1.39 per pound.
Fortune Gets it Wrong
On April 4, Fortune Magazine reported Why President Trump’s Trade War With China Could Make Bacon More Expensive.
The idea never made any sense given that China’s tariff on soybeans and pork would lead to oversupply in the US.
Immediate Impact
A Statehouse News article, out today reflects reality: Pork Tariff Talk Has Immediate Impact On Market.
“The message is get it worked out,” said Brian Watkins, a lifelong hog farmer from Kenton who wants President Donald Trump, top federal officials and leaders from China to resolve the impending trade dilemma. “Something happens somewhere in the world that very quickly, I mean immediately essentially within hours gets filtered into the price being paid for what we receive,” Watkins said.
Hog Farmers Worried
NPR reports Hog Farmers Worry They’ll Be Further Squeezed By China’s Pork Tariffs.
In Nevada, Iowa, Howard Hill has a farm with corn, soybeans, cattle and hogs. He markets 7,000 hogs each year and about a quarter of them will end up overseas. Hill says he has seen hog prices drop to the point where it may cost some farmers more to raise a pig than they can sell it for.
Trump Admits Impact
The WSJ reports Trump Acknowledges Farmers to Feel Impact From China Trade Actions.
Trump responded with a patriotic message.
Saying that farmers “are great patriots,” Mr. Trump acknowledged Monday they may feel pinched by new Chinese tariffs aimed at the president’s political base, including levies targeting U.S. agricultural exports from Farm Belt states. He said that farmers “will be better off,” but added that “it will take a little while to get there.”
“We’ll make it up to them,” Mr. Trump said Monday at the start of a cabinet meeting at the White House. “And in the end they’re going to be much stronger than they are now.”
Trade War Foolishness
Note the irony of this madness.
China’s retaliation is good for US consumers. Trump’s tariffs, which tend to raise prices are bad for US consumers.
Get a Freezer
If you don’t have a freezer, get one. $1.39 a pound for center-cut loin is an amazingly good price. The Meijer Sale runs through April 14.
Deals like this, albeit usually not quite this good, is why food cost inflation is way overstated for those smart enough to have a freezer.
Vegetarians may be a different story.
Mike “Mish” Shedlock
mmm mmm gonna cook me some pork chops Chinese style
“Vegetarians may be a different story.”
You bet. And it is a longer story as well. If you stock up on so much pork and chicken and red meat, and end up eating mostly that, then it will be a considerably shorter story! The good thing is, you don’t have to pay healthcare premiums for long! 😉
Smithfield foods the largest hog processing company is owned by the Chinese
Those darned sneaky Chinese, are planning on winning this war by killing us with cheap, bacon induced heart attacks…..
Never had them. Are herpes really that bad as people are saying? Is there anything else you want to share with others?
Dude, leave the comedy to the professionals. You’re as funny as herpes.
or, it’s just an opportunity to have a sale. Yes, I’m a libertarian, and a free-trade person. In fact, I consider myself more free-trade than most people here, and I think that the free market will easily adapt and adjust to the new Chinese tariffs by having China import from Brazil, and having people that currently buy from Brazil start buying more from the US.
Probably Globex is rigged. You should rather look at supermarket prices.
Globex soybean prices are not crashing and hog prices futures look normal. This is a case of the sky is falling because of Trump.
+1 for interpreting the joke literally. Hope more free-trade people (assuming you are one) would have such a healthy sense of humor as you. 🙂
I don’t understand why you think this is a joke. Obviously the free market can and does provide this service. link to expertservice.biz
@Mish I think Kinuachdrach comment had emphasis on whether “unilateral elimination of trade tariffs is actually a dumb idea”, because it may give unfair long-term advantage to China at the expense of short-term benefit for US consumers.
The emphasis was not so much about “eliminating all domestic subsidies” to which both of you already agreed on.
Maybe you intended to answer on that part later. In case that did not slip out of your attention, then I apologize in advance for pointing out the obvious.
“I am in complete agreement on eliminating all domestic subsidies — understanding that that would mean instant death for most of the “renewable energy” industries (Photovoltaics, Wind) and for electric cars. Yes, that would mean loss of jobs, but correcting the mis-allocation of resources into those losers could (over time) compensate.”
Without a doubt, we have misallocated resources. We have zombie companies that survive only on government support. The sad thing is, these zombie corporations often make it hard for legitimate industries without subsidies to survive!
Mish — Thanks for answering the question about what you would do.
I am in complete agreement on eliminating all domestic subsidies — understanding that that would mean instant death for most of the “renewable energy” industries (Photovoltaics, Wind) and for electric cars. Yes, that would mean loss of jobs, but correcting the mis-allocation of resources into those losers could (over time) compensate.
Unilateral elimination of tariffs is different. While mutual elimination of tariffs would undoubtedly be a good thing, unilateral action seems like a dumb thing to do in the real world.
Back in the good old days, Standard Oil was accused of under-cutting competitors to put them out of business, and then jacking up prices in the resulting monopoly. Sounds like something straight out the mercantilist playbook which China is following. Thus unilateral elimination of tariffs might (would?) result in a short-term gain for the consumer … followed by a long-term loss.
I have been trying to think of other contexts where the “Turn The Other Cheek” approach has been proven to work. There was a fair degree of unilateral disarmament by the Allies after World War I — it would be hard to use that as an example of unilateral abandonment of a policy tool as being a smart course of action.
link to lmgtfy.com
Second definition of “obscene” – offensive to moral principles; repugnant.
Some synonyms for word “obscene” are “repugnant”, “terrible” and “awful”.
“Repugnant” – “extremely distasteful; unacceptable”
Extremly distasteful in sense that you resort to calling anything you don’t agree to as “idiotic”. There is your proof that “obscene” can be used in that sentence.
I hope you will not ask me to explain to you what is synonym?
Now, can you answer my other question few comments higher where I expect a simple “yes” or “no” answer without resorting to calling my comments idiotic? I appreciate your efforts.
You seem to have a peculiar definition of “obscene” . Please humiliate yourself further or provide proof.
One sided tariffs are not the same thing as subsidizing. As an example:
If California would tax its residents to subsidize goods that are exported to Michigan, then everyone in Michigan would be happy. I agree with this.
If California would impose import tariffs against Michigan businesses trying to import goods to California, then Miciganians would not be happy. Local California businesses on the other hand would be very happy because they could more easily sell their goods in both states.
There is a big difference between tariffs and subsidies!
Mish, can you delete your obscene comments?
Wait, then again, better leave them for others to see.
I agree with Mish. The best trade agreement is no agreement. Just let everything in. If other countries want to subsidize our consumption then let them have at it.
I have explained my reasoning on trade at least 20 times – When someone makes an idiotic joke I am not about to explain why it’s idiotic for the 21st time
Geez, are all libertarians so uptight?
I think Kinuachdrach asked very valid question. Mish answered that “one sided free markets are still the solution”. Without reasoning why. Hence a very well deserved libertarian joke that “free markets will even replace lightbulb”.
Note that quoting Austrian Ecnonomist text books where some guy said that free markets are the answer to every problem is not a good reason. Libertarians quoting those books are not much different from hard-core conservatives quoting Bible to win their debate. None of the Austrian theories have ever been tried in practice so how can anyone claim that they work and are not anything more than just opinions.
But serious question – does China imposing tariffs on US companies and US not imposing tariffs on Chinese companies, don’t put US companies at disadvantage and Chinese companies at advantage? A simple “Yes or No” question that no hard-core libertarian on this blog has ever dared to answer.
Based on Mish articles I have impression that he thinks that only actor in US economy is US consumer. And that US business could completely disappear from US economy and US would still somehow magically have a healthy consumer base? I think the US business are still around only because it readjusted and became management and research oriented. But will it be able to readjust again?
P.S.
I agree with Robert Shiller that tariffs could cause recession in US because some US companies might have to change their long-term investment plans and that could incur some loss. But is this something we should try to avoid?
Then make a joke.
Relax, have some sense of humor.
Idiotic comments are subject to deletion. Then again, I prefer to leave them so that others can reflect on the stupidity and laugh.
How many libertarians it takes to replace a lightbulb?
None, the free markets will replace lightbulb for them!
“The one possible exception, and I would have to think about it some, would be a genuine threat to national security. In practice, I do not think it would happen.” It already happened under the Obama Administration, Rare earth metals are vital to our national security, but China produces 98% of many of them.
Wanna hear joke about libertarians?
Boneless, skinless chicken breasts are often on sale at great prices. Beef prices are up vs 10 years ago. Even 5 years ago one could occasionally find whole beef tenderloin for $4.99. I have not seen that price now for years. I have seen prime rib at that price recently.
I would do what I have stated on many occasions: I would eliminate all tariffs and all subsidies immediately, regardless of what any other nation did. If it benefits the US consumer it’s a good deal. The one possible exception, and I would have to think about it some, would be a genuine threat to national security. In practice, I do not think it would happen.
Mish has stated many times what he would do: unilaterally eliminate all tariffs.
Mish — serious question: What would Mish do, if Mish were in a position of influence?
Situation is that US tariffs are already very low on Chinese imports; Chinese tariff (and non-tariff barriers) to US exports are very high; unsurprisingly, the US trade deficit with China has become unsustainable, and the long-term costs of hollowing out the productive capacity of the US economy are becoming increasingly obvious.
What would Mish do? Would he completely eliminate the remaining minor US tariffs and pocket some short-term profits? Would he jawbone China to reduce their tariffs and non-tariff barriers? Would he do an Obama and go & play golf?
Trump is paying for the wall.
Onions, celery, potatoes, dried beans, carrots, cabbage, romaine lettuce, etc. still cheap. If you want to buy baby spinach or quinoa for $10 or more per pound, well , there’s a sucker born every minute. I haven’t paid more than $2 per pound for boneless chicken breast or pork loin in 15years or more.