World News

Hormel joins Tyson Foods, JBS in removing drug banned by China from hog supply

By Tom Polansek

CHICAGO (Reuters) – Spam-maker Hormel Foods Corp <HRL.N> is eliminating a growth drug banned by China from its hog supply, the company said on Tuesday, joining rivals that are seeking to increase meat sales to Chinese buyers grappling with a pork shortage.

Hormel will not accept any hogs that have been fed or exposed to the drug ractopamine after April 1, the company said in a statement.

Tyson Foods Inc <TSN.N> and JBS USA said last year they would remove the drug from their supply chains. The companies’ moves ramped up the competition to profit from increased demand in China, the world’s largest pork consumer, where an outbreak of the fatal pig disease African swine fever has decimated herds.

“We have been actively monitoring the changing global market dynamics for several years and believe this decision will further position us to meet growing international demand,” Hormel said.

Ractopamine is used in some countries to raise leaner pigs, but China does not allow its use or tolerate residues in imported meat. The European Union also bans ractopamine.

Elanco Animal Health Inc <ELAN.N> manufactures Paylean, its brand name for a ractopamine feed ingredient.

“We’re disappointed in any decision that would take safe, proven technology out of the hands of farmers,” Elanco said.

China is expected to buy more U.S. pork after agreeing to significantly increase imports of American farm goods as part of an interim trade deal reached last month with Washington. Beijing said it will grant exemptions on retaliatory tariffs imposed against 696 U.S. goods, including pork, that had hampered American exports.

China agreed as part of the trade deal to work with U.S. experts to “conduct a risk assessment for ractopamine in cattle and swine as soon as possible without undue delay,” according to the agreement. It said the countries will establish a joint working group to discuss the steps to be taken based on the results of the assessment.

Chinese pork prices last week neared a record set in 2019 after measures to battle the coronavirus epidemic disrupted the transportation of pigs and the restart of slaughtering plants, crimping already tight supplies.

Hormel, which sells ham, pork tenderloin and other meat products, does not slaughter hogs itself. Instead, it partners with third-party suppliers that process the animals for Hormel’s raw materials.

(Reporting by Tom Polansek; Editing by Lisa Shumaker and Aditya Soni)