There is good news with the announcement of March pork export numbers, and even better news when one looks behind the scenes.
The good news is that U.S. pork exports in March set all-time, single-month records with per-head equivalent value of exports at $56.52. Those exports also comprised 29.4% of all U.S. pork and pork variety meat production – another record.
March pork exports hit 217,025 metric tons (478.4 million pounds) and surpassed $553.6 million in value, a 31.3% increase in volume and a 40% jump in value over year-ago levels. For the first quarter of 2011, pork exports accounted for nearly 27% of total production and $50.79 in per-head export value, reaching totals of 554,185 metric tons (1.2 billion pounds) valued at nearly $1.4 billion.
Records Set Despite Barriers
The better news is that this success has been achieved while obstacles continue to hinder U.S. pork exports. The 5% NAFTA-related tariff in Mexico remains in place. Periodic plant delistings in Russia are a fact of life. Several competing nations already have free trade agreements (FTAs) approved that reduce the tariffs on their products. However, the reality is that international trade may never take place on a perfectly level playing field. The U.S. Meat Export Federation’s (USMEF)role is to support the industry and navigate around the barriers.
On the positive side, pending U.S. FTAs with South Korea, Colombia and Panama offer potential for reducing tariffs and increasing exports, but so far that potential is yet to be realized.
What we are seeing is growing consumer and trade acceptance and appreciation of U.S. pork around the world. Programs supporting U.S. pork are reaching new audiences and new market niches, and the quality and value of American pork is being well-received.
South Korea Sets Pork Import Pace
South Korea is an excellent example of the ground U.S. pork is gaining internationally. Of course, it must be noted that South Korea is still recovering from a devastating foot-and-mouth disease (FMD) outbreak that has wiped out one-third of that nation’s hog herd. That, along with the opening of a duty-free tariff rate quota on imported pork to help keep consumer pork prices lower, has created opportunities for all international pork exporters, and the United States is capitalizing on the situation.
While all imports of pork into South Korea have skyrocketed, U.S. pork is gaining market share over international competitors. Currently, the United States holds a 36% market share of South Korea’s imported pork compared to 28% last year. For the first quarter of 2011, U.S. pork to South Korea has increased a whopping 212%, totaling 73,905 metric tons (81,296 tons), valued at $175.9 million. In March alone, totals are 41,190 metric tons (45,309 tons), valued at $94.6 million – more than four times higher than in March 2010 and by far a new monthly record.
While pork-buying patterns in South Korea tend to slow in the spring, and U.S. prices are traditionally higher in the summer, USMEF is focused on maintaining our momentum throughout the year. The National Pork Board has responded to USMEF’s request by allocating $240,000 in Pork Checkoff dollars to expand and intensify our campaign to promote U.S. pork to South Korean consumers, importers and meat industry professionals.
USMEF also is seeking additional funds through the U.S. Department of Agriculture’s Market Access Program (MAP) to sustain this program over multiple years. The United States faces aggressive competition in South Korea from the European Union (EU), Canada, Chile and other nations. The pending U.S./Korea FTA would be helpful in reducing tariffs and keeping the price of U.S. pork competitive.
For instance, South Korea and Chile approved an FTA in 2004, and since that time, Chilean pork exports to South Korea have quadrupled in value to $111.5 million last year. The EU/Korea FTA also will be implemented in July, creating additional pressure for passage of the U.S./Korea FTA to maintain a level playing field.
Other Markets Are Thriving
But South Korea isn’t the only market where U.S. pork exports are thriving. Exports to Japan, the No. 1 value market for U.S. pork exports, have continued their strong pace – up 31.7% in volume and 33.5% in value in March and a solid 24% in volume and 23% in value for the quarter. The United States also recaptured its 46% market share of Japan’s total pork imports after a slight decline last year.
Mexico remains the top volume destination for U.S. pork despite the 5% duty on bone-in ham and shoulder cuts, buying 139,591 metric tons (153,550 tons) in the first quarter, 5% less than in 2010. In terms of value, exports to Mexico are essentially level for the quarter ($255.4 million), but edged up 3.4% in March compared to year-ago levels.
The world’s biggest pork producer and consumer, the China/Hong Kong region, also saw imports of U.S. pork rise 31% to 89,043 metric tons (97,947 tons), valued at $129 million in the first quarter, while March imports of 32,614 metric tons (35,875 tons) were up 51% from last year, when H1N1 flu restrictions still hampered exports to China. Export values in March rose 31.4% to $47.5 million.
We see signs that China’s hog prices are on the rise, which will help build demand for imported pork. The U.S. market share has surged this year — accounting for 40% of China/Hong Kong’s first-quarter imports, up from just 16% last year.
While export gains are encouraging, we remain focused on other opportunities that will help sustain export growth. Niche markets within existing markets continue to provide potential for U.S. export growth, and we will continue to pursue these in locations around the globe.
Philip Seng, president and CEO
U.S. Meat Export Federation