U.S. pork exports continued an upward trend in August with the volume of total exports (combined muscle cuts and variety meat) increasing 8.6% compared to year-ago levels, while their value jumped 15.7% over August 2009 levels.
For the month, 146,459 metric tons (322.9 million pounds) of American pork valued at $369 million moved into the international markets. This steady trend moved the volume of pork exports for the year up 3% over 2009 to 1,244,338 metric tons (2.7 billion pounds), while the value is up 9% to $3.1 billion.
Mexico and Japan continue to be the leading customers for American pork, with Mexico the volume leader and Japan far and away the top value market.
Tariff Will Disrupt Trend
August was another remarkable month for U.S. pork exports to Mexico. Volume rose 7.9% to 97.8 million pounds, while the value of those exports shot up nearly 40% to $60.4 million. The numbers are not likely to be as strong in the months ahead, however, as Mexico imposed a 5% tariff on U.S. ham and shoulder cuts in the latter half of August as an outgrowth of a North American Free Trade Agreement (NAFTA) trucking dispute between the United States and Mexico.
Mexico is a very price-sensitive market. Mexican importers already are reporting some movement away from U.S. pork to alternative sources – primarily Canada.
For January through August, 2010, total U.S. pork exports to Mexico stand at 355,565 metric tons (783.9 million pounds) valued at $644 million – increases of 8% in volume and 32% in value over last year.
High-Value Japanese Market
Japan remains the leading value market and No. 2 volume market. Year-to-date, the United States has exported 291,821 metric tons (643.3 million pounds) of pork to Japan valued at $1.1 billion, slightly above the pace of 2009 and marking the sixth-consecutive year in which exports to Japan have surpassed $1 billion. Even with slight gains over last year, the United States’ market share has actually slipped slightly in Japan as competitors, including Canada and Europe, invest heavily in the market.
August results were fueled in part by a pair of aggressive promotions in the Japanese retail sector. A promotion with retail giant Aeon involving 1,600 stores and a selection of cuts (loin, tenderloin, CT butt [center cut of the Boston butt], belly, jowl meat, spare rib and back rib) sold well over a million pounds of U.S. pork. Funding for that U.S. Meat Export Federation (USMEF) promotion came from a variety of sources, including the Pork Checkoff, United Soybean Board, Nebraska Soybean Board, Minnesota Soybean Growers Association and USDA Market Access Program (MAP).
At the same time, another USMEF promotion with Japanese sauce manufacturer Ebara gave a huge boost to U.S. pork rib sales. Ebara put $3 million of its own money into an extensive television advertising campaign. In addition, it developed point-of-sale promotional materials that dovetailed perfectly with the Aeon pork campaign.
“The combination of marketing resources and in-market relationships can forge powerful promotional programs,” said USMEF President and CEO Philip Seng. “The successful Aeon promotion could not have been possible without the support of the pork and soybean checkoffs, as well as MAP funding. In the case of Ebara, we see a long-term professional relationship between the USMEF-Tokyo team and its industry counterparts in Japan leading to a multi-million-dollar infusion of Japanese corporate money into a program that benefits U.S. pork producers.”
Other Noteworthy Markets
While Canada is developing into a formidable competitor in key international markets like Japan, it remains an important customer for the U.S. pork industry. For the year, Canada has purchased 119,700 metric tons (263.9 million pounds) of U.S. pork valued at $408.9 million, increases of 14% and 25%, respectively, over 2009. The numbers improved slightly in August as monthly exports jumped 20.3% in volume and 31.9% in value vs. 2009.
Other U.S. pork export markets of note in August included:
ASEAN region: Led by exceptional growth in the Philippines, exports to the ASEAN were up 36% in volume (47,053 metric tons or 103.7 million pounds) and 48% in value ($92 million). The Philippines now accounts for nearly 80% of the ASEAN market for U.S. pork, though Singapore has also achieved solid growth this year.
• Australia: Exports are up 14% in volume (39,033 metric tons or 86 million pounds) and 28% in value ($105.7 million). U.S. pork set a record in Australia last year and has achieved steady growth there since entering the market in 2004. The United States is now the largest volume supplier of pork to Australia, holding about 36% of the imported pork market.
• China/Russia: China just missed its all-time monthly volume record (13,577 metric tons or 29.9 million pounds valued at $21.7 million) in August. Pork to Russia is also noteworthy (10,141 metric tons or 22.4 million pounds valued at $19.5 million), even though exports were constrained by a number of delisted plants. This is a strong rebound in demand for U.S. pork (particularly variety meat) in two key markets that were down sharply in 2009 and early 2010.
“While total exports to China and Russia are not where we would like them to be at this point in the year, the resurgence in activity in both markets is good news, as these are critical components in our effort to maintain a diverse base of export markets to support continued U.S. pork export growth,” Seng notes.
U.S. Meat Export Federation