Source: U.S. Meat Export Federation
Retaliatory tariffs are beginning to leave a mark on U.S. pork exports. While January through August, combined pork and pork variety meat exports remained 1% ahead of last year’s record pace at 1.63 million metric tons, August pork export volume was down 1% from last year and export value fell 3% to $494.1 million.
At 182,372 mt., August exports accounted for 21.9% of total pork production, down from 23.1% a year ago, while the percentage of muscle cuts exported held steady at 19.2%. Pork muscle cuts fared better in August, increasing 5% to 148,736 mt, but value still declined 1% to $414.7 million. Pork variety meat exports declined sharply in August in both volume (33,636 mt, down 20%) and value ($79.4 million, down 15%).
For January through August, export value has increased 3% to $4.32 billion. For pork muscle cuts alone, exports increased 6% from a year ago in volume (1.31 million mt) and 4% in value ($3.58 billion). During that eight-month period, exports equaled 26.3% of total pork production (down from 26.9% a year ago), while the percentage of muscle cuts exported was 22.8% (up from 22.4%). Pork export value averaged $44.29 per head slaughtered in August, down 8% from a year ago, while the January-August per-head average dropped 1% to $53.28.
China’s duty rate on pork muscle cuts and variety meat increased from 12 to 37% in April and from 37 to 62% in July. Mexico’s duty rate on pork muscle cuts increased from zero to 10% in June and jumped to 20% in July (pork variety meats continue to enter Mexico duty-free). Beginning in June, Mexico also imposed a 15% duty on sausages and a 20% duty on some prepared or preserved hams and shoulders.
“Pork exports have posted an impressive performance in 2018, but the retaliatory duties are a clearly a significant obstacle,” says USMEF President and CEO Dan Halstrom. “The fact that U.S. trade officials were able to secure duty-free access for U.S. red meat in the new U.S.-Mexico-Canada Agreement is critically important, and we are hopeful that duty-free access for U.S. pork entering Mexico will be restored soon. Tariff relief in China may not come as quickly, but USMEF continues to work with industry partners to keep as much product as possible moving to China while also working aggressively to expand exports in other key markets, including Korea, Central and South America, the ASEAN region and Australia.”
Japan, Korea and Latin America hungry for U.S. pork
August pork exports to leading value market Japan increased 10% from a year ago to 34,935 mt, valued at $146.8 million (up 5% and the highest of 2018). For January through August, exports were up 2% from a year ago in both volume (265,250 mt) and value ($1.1 billion).
Pork exports to Korea continued to surge in August, increasing 39% in volume to 11,303 mt and 40% in value to $31.3 million. This pushed January-August exports to 159,536 mt (up 43%) valued at $455.6 million (up 49%). Exports of pork variety meat, including bungs and feet, have contributed significantly to this growth. Through August, pork variety meat exports to Korea increased 84% from a year ago in volume (10,358 mt) and more than doubled in value to $32.4 million (up 111%). Most U.S. pork products enter Korea duty-free, and this will continue under the revised KORUS agreement.
August pork exports to leading volume market Mexico fell 4% from a year ago to 62,319 mt, while value dropped 21% to $103 million. Through August, exports to Mexico remained 2% ahead of last year’s record pace at 532,034 mt, but value declined 6% to $921.1 million.
August exports to the China/Hong Kong region fell 43% from a year ago to 19,732 mt, with value dropping 32% to $52.9 million. For January through August, exports were down 24% in volume (257,939 mt) and fell 13% in value to $615.9 million.
January-August highlights for U.S. pork exports include:
- Led by strong growth in Colombia and Peru, exports to South America increased 29% from a year ago in volume (82,153 mt) and 24% in value ($204.4 million). A slow start to the year kept exports to Chile below last year’s record volume pace, but shipments regained momentum in July and August.
- Following a record performance in 2017, pork exports to Central America surged 20% higher in volume (52,528 mt) and increased 17% in value ($123.8 million). Pork exports to all seven Central American nations have achieved double-digit growth in 2018.
- Exports to the Dominican Republic continue to gain momentum, increasing 30% in volume (29,480 mt) and 25% in value ($64.5 million).
- Led by strong growth in the Philippines and Vietnam, exports to the ASEAN region increased 29% in volume (39,021 mt) and 28% in value ($100.1 million). The ASEAN is an especially important destination for pork variety meat, with these exports nearly doubling from a year ago in both volume (14,273 mt, up 99%) and value ($24.2 million, up 94%).
- Exports to Australia were 9% ahead of last year’s record pace in both volume (51,070 mt) and value ($147.5 million). Australia is the third-largest destination for U.S. hams exported for further processing, trailing only Mexico and China/Hong Kong.