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Canada, Japan, Mexico and South Korea are four of the U.S. pork industry’s top five export markets. National Pork Board

October pork exports take a dip; Beef continues record value pace

Upcoming trade negotiations with Japan are critical for the U.S. pork and beef industries, as all major competitors in the Japanese market will soon benefit from significant tariff reductions.

October pork exports trended seasonally higher compared to recent months but were still below October 2017, while U.S. beef exports remained on a record-shattering value pace for the month, according to the latest data released by the USDA and compiled by the U.S. Meat Export Federation.

October pork export volume was 207,725 metric tons, the largest since May but still 2% lower year-over-year, reflecting smaller variety meat exports. Export value ($536.5 million) was also the largest since May but still down 5% from a year ago. For January through October, pork exports were 1% above last year’s record pace at 2.02 million mt, while value was also up 1% to $5.33 billion. For pork muscle cuts only, January-October exports increased 5% from a year ago in volume (1.63 million mt), valued at $4.43 billion (up 2%).

October exports accounted for 23.6% of total pork production, down from 25.4% a year ago. For muscle cuts only, the percentage exported was 20.7% — down from 21.6% in October 2017. For January through October, pork exports accounted for 25.8% of total production, down from 26.4% last year, but the percentage of muscle cuts exported increased from 22 to 22.5%. Export value per head slaughtered was down 10% from a year ago in October to $46.07. The January-October average was $51.74, down 2%.

“Despite some very significant obstacles, global demand dynamics for U.S. pork remain strong,” says Dan Halstrom, USMEF president and CEO. “We are hopeful that the events of the past week — the signing of the U.S.-Mexico-Canada Agreement and the return of trade negotiations between the U.S. and China — represent progress toward elimination of retaliatory duties imposed by key trading partners. If we can put that situation behind us, U.S. pork is well-positioned to regain the momentum displayed early in the year.”

October beef exports totaled 117,838 mt, up 6% from a year ago, valued at $727.4 million — up 10% and the second-highest monthly total on record. For January through October, beef exports totaled 1.13 million mt, up 9% year-over-year, while value was up 17% to $6.92 billion. For beef muscle cuts only, exports increased 12% in volume (867,714 mt) and 19% in value ($6.19 billion).

“Demand for U.S. beef continues to climb in nearly every region of the world, with annual records already falling in some markets,” Halstrom says. “Per-head export value will also easily set a new record in 2018, which illustrates the strong returns exports are delivering for cattle producers and for the entire supply chain.”

Halstrom adds that upcoming trade negotiations with Japan are critical for the U.S. pork and beef industries, as all major competitors in the Japanese market will soon benefit from significant tariff reductions. USMEF, along with producers, exporters and other industry organizations submitted comments to the Office of the U.S. Trade Representative underscoring the importance and urgency of these negotiations and will convey these points again in USTR’s Dec. 10 public hearing.

New record for U.S. pork in Korea; growth in Japan; ASEAN also bolster October exports
Pork exports to South Korea continued to gain momentum in October, increasing 27% from a year ago in volume (19,588 mt) and 17% in value ($49.2 million). January-October exports to Korea increased 41% in volume (191,610 mt) and 44% in value ($538.4 million) — already topping the annual records set in 2011. Even as imports from all main suppliers have expanded this year, U.S. share of Korea’s pork imports has increased significantly, rising from 36 to 39%.

October pork exports to leading value market Japan totaled 35,134 mt, up 8% from a year ago, while export value climbed 9% to $146.6 million. This pushed January-October exports 2% ahead of last year’s pace in volume (330,480 mt) and 3% higher in value ($1.36 billion). This included a slight decrease in chilled pork volume (176,118 mt) while value was up 2% to $849 million. U.S. share of Japan’s pork imports held close to 35%, down slightly from last year. But Japan imported a record volume of ground seasoned pork from the European Union in October and U.S. share in that category has dropped from 71 to 65% in 2018. Unfortunately this trend is likely to continue with upcoming implementation of the Japan-EU Economic Partnership Agreement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which will reduce tariffs on all pork and phase the import duty on ground seasoned pork to zero over the next six years.

Led by strong growth in the Philippines and Vietnam, October pork exports to the ASEAN region increased 91% in volume (9,009 mt) and 59% in value ($22 million). January-October exports increased 46% in volume (58,415 mt) and 33% in value ($145.5 million). This was fueled in part by a surge in pork variety meat exports to the region, which more than doubled in both volume (24,090 mt, up 149%) and value ($39 million, up 126%).

Other January-October results for U.S. pork exports include:

  • Pork exports to South America, led by strong growth in Colombia and Peru and a rebound in exports to Chile, reached 106,444 mt — up 25% and already surpassing last year’s annual record. Export value was up 19% to $259.9 million.
  • Although October results slowed from a year ago, January-October exports to Central America still increased 17% in volume (66,428 mt) and 13% in value ($156.6 million). Exports increased to leading markets Honduras and Guatemala and were sharply higher to Panama, El Salvador, Nicaragua and Costa Rica.
  • Exports to the Dominican Republic have already exceeded annual records in both volume (36,022 mt, up 36%) and value ($78.4 million, up 29%).
  • Exports to Australia were up 10% to 61,994 mt, with value climbing 8% to $178.8 million. Australia is a critical market for U.S. hams, especially with retaliatory duties in place in Mexico and China.
  • Despite a fifth straight month in which pork shipments were below year-ago levels, exports to leading volume market Mexico were still steady with last year’s record pace at 656,284 mt. But export value, pressured by the retaliatory duties first imposed in June, declined by 9% to $1.12 billion.
  • Exports to China/Hong Kong declined 27% from a year ago to 302,151 mt, with value dropping 16% to $730 million. China/Hong Kong is the largest destination for pork variety meat exports, which were down 28% in volume (194,472 mt) and 15% in value ($512.4 million).
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