In March of 2011, the outlook for U.S. pork exports was in question.  Japan, the top customer for American pork, suffered a natural disaster of epic proportions – a devastating earthquake that spawned a killer tsunami and a nuclear meltdown.  Many analysts predicted not only would the market for U.S. pork exports to Japan tumble, it might never recover.

Fast-forward 11 months and the picture is much different.  Not only have U.S. pork exports maintained their pace, they already have set new value records and are on track to set a new volume record.

In short, Japan is a critical trading partner for the U.S. pork industry.  Through the first 11 months of 2011, Japan bought 451,509 metric tons (995.4 million pounds) of U.S. pork valued at nearly $1.8 billion, putting them within reach of being the first nation to import one billion pounds of U.S. pork in a single year (valued at $2 billion).  The totals marked increases of 14% in volume and 19% in value – both achieved despite the hardships inflicted by the earthquake and its aftermath.

U.S. pork exports set new records in 2011, growing 18% in volume (through November) to just over 2 million metric tons (4.5 billion pounds) and 27% in value to more than $5.5 billion.  It is worth noting that Japan accounts for 22.1% of all U.S. pork exports by volume and 32.4% in value.

While the United States’ share of Japan’s imported pork market is dominant (42.5% by value; 45.4% by volume, according to the Global Trade Atlas), the United States is just one of 26 nations that sold pork to Japan in 2011. Canada, Denmark, Mexico, Chile, Spain, China and Poland are our nearest competitors.

With such strong growth and significant market share, what does the future hold for U.S. pork in Japan?  When you consider that Japan is 52% self-sufficient in pork production, the United States’ portion of the country’s market remains only 21.1%.

The good news for the U.S. pork industry is that pork is the fastest-growing protein among Japanese consumers. American product is well-represented among each of the key market segments.  Currently, 40% of U.S. pork exports go to further processing, 35% to retail and 25% to the hotel, restaurant and institutional (HRI) sector.

The key to maintaining U.S. Pork’s momentum in Japan is continuing to expand the niches in this diverse market.  The more diversity, the less vulnerable it is to aggressive international competitors. The U.S. Meat Export Federation (USMEF) is actively pursuing a number of those niches.  One new area where U.S. pork is enjoying success is a value-added, chilled pork initiative.  A number of U.S. pork processors have developed micro-brands of chilled pork.  Japan already supports several hundred pork micro-brands, many of them regional products. The U.S. industry has found a receptive audience among retailers and food service operators looking for new brands that offer a point of distinction.  The United States has an advantage because many European Union and South American competitors are not able to supply chilled product to Japan.

In addition, U.S. pork has been making gains with newly merchandised barbecued pulled pork products.  On the retail front, the convenience store sector continues to offer growth potential.  With more than 40,000 convenience stores in the country, including more than 13,000 Seven-Eleven stores that have been long-time USMEF partners, this niche has proven to be a fertile area for pork sales through bento (lunch) boxes and packaged product.

To help maintain market diversification, USMEF spent much of 2011 focusing on mid-size meat processors, a segment that traditionally purchases product domestically.  As these processors become more familiar with the excellent taste and competitive pricing of U.S. pork, the market will continue to grow.