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China’s Exports Of Amino Acids Threatens A Critical U.S. Market

In the last few years the U.S. has seen a sharp increase in the imports of amino acids from China, which is used to supplement feed for farm animals. While this has allowed American farmers to save some money, it could also leave them dangerously vulnerable were the Chinese government decide to wield its exports as a strategic weapon, as it has done with other critical exports. Our government should take steps to ensure that such a thing cannot happen. 

To understand the threat posed by Chinese amino acids, it is necessary to understand the basics of amino acids. Most farmers in the U.S. supplement the feed they provide their animals with amino acids, which improve their health, size, and productivity: for instance, it causes chickens to produce more and bigger eggs. (bodybuilders also consume amino acids to help them grow muscle as well, but this is a distinct market.)

Until recently most amino acids consumed in the U.S. were produced domestically in the Midwest. However, three years ago a pandemic decimated the population of hogs in China, which in turn reduced demand for amino acids in China.

Chinese amino acid producers suddenly found themselves with a large surplus of threonine, which is the amino acid that chicken and pigs typically consume. Their response was to sell their surplus in the United States. 

Predictably, the influx of foreign supply drove down the price of threonine. The next year, with China’s hog population still decimated, imports of threonine from China increased further, depressing domestic prices even more. 

The influx in imports has buffeted the domestic producers of amino acids. My colleague Russell Kashian, a professor at the University of Wisconsin Whitewater, and I studied the U.S. amino acid market in light of the import surge and we found that it poses a threat to the entire domestic industry, which produced over $3 billion of output last year and supports nearly 30,000 jobs. Nearly all of these American jobs would be at jeopardy if present trends continue. 


We believe that the surge in imports and steep resultant decline in domestic prices merits closer study by the U.S. Trade Representative Katherine Tai, via a Section 301 investigation. The issue is that the cessation of domestic production of amino acids would be potentially problematic for U.S. farmers, especially if the remaining suppliers were all located in China: Given its critical importance to farmers and the U.S. agricultural economy, leaving U.S. farmers wholly dependent on supply deriving from a country with a government that has shown no compunction towards manipulating supply for geostrategic reasons would be highly problematic. 

I suspect that Washington has yet to act because of the benefits of lower amino acids prices, but the fact that the import surge is coming solely from China should induce it to give further study to the situation. The market resembles the rare earth conundrum currently facing the electric auto industry: Because lithium and other metals are produced and processed almost wholly in China, the entire industry is now dependent upon its government’s predilections, and the U.S. government has been encouraging domestic producers to quickly invest to begin production in the U.S. to lessen this problematic dependence. 

It is time to do the same for the amino acid market.

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