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U.S. losing ground seasoned pork market share in Japan

National Pork Board The Japanese red meat market is intensely competitive.
U.S. ground seasoned pork faces a 20% duty rate in Japan, while competitors such as the European Union, Canada and Chile pay 13.3% due to recent trade agreements.

While the latest U.S. pork export results showed an uptick in shipments to Japan, January to May exports to the leading value destination for U.S. pork were still below last year’s pace. One major factor in the export decline is largely due to U.S. ground seasoned pork getting elbowed out by the competition, says U.S. Meat Export Federation economist Erin Borror.

“We were encouraged to seek bigger U.S. exports of pork to Japan and especially in the chilled category. Those chilled volumes are holding roughly steady with a year ago,” Borror says. “But what we're most concerned about is the category of ground seasoned pork.”

After trending lower through the first four months this year, May pork exports to Japan increased 5% from a year ago to 36,373 metric tons, while export value ($148.6 million, up 3%) was the highest in 18 months. However, U.S. ground seasoned pork faces a 20% duty rate in Japan, while competitors such as the European Union, Canada and Chile pay 13.3% due to recent trade agreements.

“It's high value product, but it's used as a raw material for input into Japan sausage making, so it's extremely price driven, price competitive, and our tariffs are still 20% while our competitors are at 13.3% and that's led to a direct drop in Japan's imports of this product from the United States,” Borror says. “A decrease of about $46 million just in the first five months of the year and it's been a loss in U.S. market share in that category from 67% to 57%. In the past we were really the dominant supplier with over 70% share and it’s a category that we see as still having potential in the future, if we can return to a level playing field.”

On a positive note, Borror sees outstanding opportunities if the U.S. can secure a trade agreement with Japan.

“The Japanese market for pork imports is still growing, their pork consumption is actually still growing and Japan is reducing and eliminating tariffs on all processed pork products and so big opportunities,” Borror says. “This gets really exciting if we think about the U.S. having again the same market access terms as our competitors because we can imagine Japan buying more and more of these value added processed products that have been mostly produced in Japan because of high tariffs that have kept the Japanese market limited to mostly imports of chilled and frozen and ground seasoned pork.”

Source: USMEF, which is solely responsible for the information provided, and wholly owns the information. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.

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