ATLANTA — According to the Department of Commerce, US exports of dog and cat food reached record-setting levels in 2021. Exports of these products jumped nearly 20% from 2020 to 2021, totaling $2.05 million last year.
However, the trade policy behind this sector isn’t perfect. Pending appointments at the US Department of Agriculture (USDA) and the Office of the United States Trade Representative (USTR), continued tension with China and African swine fever risk mitigation all affect the United States’ global export market, including that of pet food.
Keeping US pet food products competitive and accessible in the global marketplace is a priority of the American Feed Industry Association (AFIA). Gina Tumbarello, senior director of policy and trade at AFIA, shared a trade update for this sector during the organization’s 2022 Pet Food Conference on Jan. 25, held in conjunction with the International Production & Processing Expo (IPPE) in Atlanta, Ga.
Top export markets
Canada remains the United States’ top export market for pet food, followed by Mexico. While US pet food exports to Mexico look small next to those to Canada, exports to Mexico grew drastically in 2021. According to Trade Data Monitor numbers shared by AFIA, US pet food exports to Mexico increased by 36% in 2021. The country imported roughly $119.3 million worth of US pet food products from January to October 2021, compared to $101.1 million in the full year 2020.
“I'm suspecting there is something happening in industry,” Tumbarello said. “Perhaps it's easier registration, a less arduous or cumbersome process of getting product into the market, but that is something on our list to figure out, because that is a pretty hefty jump for Mexico.”
US pet food exports to Japan, Australia, China, South Korea, the Philippines, Columbia, Costa Rica and New Zealand also grew from 2020 to 2021. Turning to pet food exports made by other countries, China, Russia and Thailand saw the largest growth in the first 11 months of 2021 compared to the full year 2020.
“China's exports of dog and cat food have actually been increasing 31%, which I think is a fairly interesting number, primarily going to European countries, Indonesia, and a little bit to the US as well,” Tumbarello shared. “Thailand's exports have increased 18%. Russia’s exports have increased 20%, primarily to the EU countries and the former Soviet area as well.”
United States trade policy under the Biden administration has differed from the previous administration in terms of climate policy, environmental impact and the promotion of social justice as a trade policy goal, Tumbarello pointed out. However, the administration has been sluggish to appoint an undersecretary for trade and foreign agricultural affairs with the USDA, renew the Trade Promotion Authority — which helps the US in facilitating trade negotiations through Congress — and pursue new trade agreements, she stated.
Katherine Tai was sworn in on March 2021 as ambassador for the USTR, but the legislative branch has yet to hold hearings to swear in Elaine Trevino, nominated by the Biden administration as chief agricultural negotiator with the USTR in September 2021.
“Agriculture is the shining star of the US economy,” Tumbarello said. “We generally don't have a trade deficit like some other industries. So, it's a bit shocking to me, on the policy side, why we wouldn't have a greater focus, already a year in, on agricultural trade policy.”
The United States is currently in trade talks with the European Union, Kenya and China, but no new deals have been made yet. The administration has been working on the Indo-Pacific Economic Framework — which highlights trade opportunities with countries surrounding the Indian Ocean, including Japan, Thailand, Vietnam, Singapore, the Philippines, Indonesia, Australia, New Zealand and other countries — and setting up advisory committees on trade and environmental policy.
The continuing trade war between the United States and China is “bigger than agriculture,” Tumbarello stated. We are two years into the Phase One agreement between the two counties, and China is falling short on certain agricultural commitments it made as part of that agreement.
“We do continue to have tariffs on imports from China, and China continues to have tariffs on imports from the US,” Tumbarello said.
However, US pet food exports to China continue to grow under the Phase One agreement, but this growth is somewhat contingent on other factors of the trade war, Tumbarello suggested.
Under the Phase One agreement, US facilities are now able to register for export to China instead of going through the Hong Kong market, which has facilitated easier access to the Chinese market for US pet food exporters.
“I think there's a lot of potential in China, all things remaining equal,” she added. “Another thing to note, this is with the increased tariff, the increase on pet food products to China, which stand between 24% and 38% on US products, which is a really high tariff.”
In March 2021, Russia banned imports of pet food, animal feed and animal food ingredients from the United States. The United States exported roughly $2.8 million worth of dog and cat food products to Russia in 2020. Tumbarello shared the United States trade relationship with Russia “is not getting any better,” and doesn’t expect to see much progress made in this area.
“Here's a prime example of products being banned under the guise of there being unapproved GMO events,” Tumbarello said. “I'm not aware of any evidence to that, but this is a prime example of what could happen with other countries such as China, banning products because they want to ban products and generally not following the rules of trade.”
Another potential threat lies with Mexico phasing out GMO corn for human-grade foods. While this development doesn’t necessarily affect the pet food space currently, Tumbarello warned that the country — one of the United States’ top export markets for pet food products — could extend this GMO restriction across the board to include pet food containing GMO ingredients.
“The downflow to our products obviously would be very detrimental,” she said.
African swine fever
African swine fever has not yet crossed American borders, but the risk is being considered and monitored by legislators and animal food organizations including AFIA. Tumbarello pointed to the importance of staying ahead of the risk and potential consequences to keep trade running smoothly.
Currently, all feed products containing animal-derived ingredients are exported with a 16-4 health certificate, which states that the United States is free of African swine fever and other animal diseases, Tumbarello explained. This implicates pet food exports as well as those of other animal feed products.
“…Because our protocols are tied to this 16-4 being provided when we export products to almost all of these countries, if we were to have an outbreak in the US, we would no longer be able to check that box and say that we are free of African swine fever, and we would not be able to export on a 16-4.”
To address this risk, Tumbarello shared AFIA has been working with other industry groups on negotiating updates to these health certificates with key trading partners to separate porcine and non-porcine ingredients and avoiding a potential halt on pet food and animal feed exports.
Where we go from here
To facilitate trade between the United States pet food industry and the global marketplace, AFIA continues to help industry partners navigate the export market landscape and challenges as they arise, which include understanding regulatory requirements and getting products and facilities registered accordingly.
“We are developing some how-to guides on a number of markets,” Tumbarello said. “Pet food will be included in some of those guides.”
Vietnam continues to be a key “up-and-coming” market opportunity for the pet food industry. AFIA is working to roll out social media campaigns in the country to educate consumers on complete-and-balanced pet food, as well as the health, safety and efficacy of US-manufactured pet food products in general.
Tumbarello closed her presentation by reiterating the importance of prioritizing trade policy to help US pet food manufacturers lead on the international stage.
“Agriculture and the pet food industry need agricultural leadership within this administration,” she concluded. “That's going to be key for us to be moving forward and continue to be competitive globally. It's important for us to reengage in negotiations, continue to find ways to level the playing field internationally, have greater market access [and] reduce tariffs.”
Continue reading our coverage of AFIA’s 2022 Pet Food Conference.