While U.S. pork exports are approaching record levels, there are still significant opportunities for growth in the international marketplace. These new opportunities are not limited to the new, exotic and unexplored regions of the globe.
Examples of these unexplored or under-explored areas include Central America, Kazakhstan and South Africa. Those areas were recently identified by U.S. Meat Export Federation’s (USMEF) international directors and marketing experts in conjunction with representatives of the U.S. pork industry’s processors and exporters.
Other opportunities include niches within existing markets that have been dominated by foreign competitors, but offer significant potential for increased U.S. pork exports. Although both categories of prospects are being aggressively pursued, the latter group is particularly enticing.
When we identify a niche within a well-developed market and capture at least a portion of that niche, the U.S. pork industry wins in two ways. First, developed markets have an established infrastructure and an appetite for pork, so typically they will pay the highest prices for our products. When we sell muscle cuts or value-added pork instead of commodity pork, we return a higher value to our exporters and our producers.
The second incentive is to displace market share of competing nations. In the last year, we have seen our competitors – Canada, Denmark, Chile and Mexico – take a much more aggressive approach to the high-value markets, such as Japan, South Korea and Hong Kong.
USMEF is currently assessing numerous opportunities, ranging from Kazakhstan, where the United States has dominated the relatively small pork import market in recent years, to South Africa, with its 50 million residents and a large pork demand that has been dominated by European Union and Canadian suppliers.
At the other end of the spectrum is the highest-value market for pork in the world, Japan, where 25 countries have exported pork this year. The United States is currently the No. 1 supplier of pork to Japan, although our market share slipped by about 2% this year, according to the Global Trade Atlas. This may be a reflection of reduced spending by the U.S. industry while other nations have increased theirs.
A closer look at the Japanese market reveals that there are really two separate pork markets with many subsets. Through the first 10 months of 2010, Global Trade Atlas statistics show that the United States is far ahead of the field in the $1.1 billion chilled pork imported market with a 3-to-1 lead over second-place Canada.
But the frozen pork import market in Japan is another story. Seventeen countries export frozen pork to Japan and the United States, Denmark and Canada are running neck-and-neck for the lead in the $2.6-billion market. By virtue of its size, product margins and potential growth for U.S. pork, the frozen pork market in Japan is a key target for USMEF going forward.
As we evaluate markets, from small Caribbean nations to gigantic China, we continue to explore niches ranging from the sale of frozen product for processing to chilled product sold through high-end outlets like hotels, retail stores and airlines. The key to unlocking these new markets is the guidance received from our in-country staff, typically hired from the meat industry in their respective countries. Utilizing their contacts in the food service, retail and further processing sectors, they provide recommendations on where U.S. pork can be competitive in terms of quality and price.
The year ahead will be an exciting one for U.S. pork in the international marketplace. There will be challenges, such as maintaining access to key markets like China and Russia, and sustaining momentum in Mexico, where the economy continues to falter and where a 5% duty on U.S. pork imports related to a North American Free Trade Agreement (NAFTA) trucking dispute remains.
On the positive side, if the U.S. Congress and South Korea’s legislature approves the recently announced free trade agreement, tariffs on American pork will begin to decline. In addition, we are continuing to see strong signs of export growth in Canada, the ASEAN region, Australia, the Caribbean, and Central and South America. And, when access can be maintained, China will remain a key customer for U.S. pork.
U.S. Meat Export Federation