The Office of the U.S. Trade Representative and the USDA recently announced that U.S. pork and pork products are eligible for export to Argentina. The market is open to all U.S. frozen and chilled pork muscle cuts, as well as cooked/processed products and natural salted casings. Pork offals are also eligible, except for those derived from internal organs.
“Our organization feels that USDA and USTR did a phenomenal job in getting this deal done, says U.S. Meat Export Federation President and CEO Dan Halstrom. “Access is pretty much wide open on the muscle cut side, so this provides more avenues, more destinations, for some of these key cuts at a time of very large U.S. pork production. The initial USDA estimate is for $10 million per year in sales, but over time we see a lot of upside potential in Argentina. USMEF staff in the region already see demand emerging for boneless shoulder butts, we also think there is opportunity for raw material for further processing — items such as picnics and hams, and possibly variety meats as well.”
At 44 million, Argentina has the third largest population in South America (behind Brazil and Colombia) and its per capita pork consumption has grown rapidly in recent years, increasing nearly 60% since 2011. Based on USDA estimates, per capita consumption reached nearly 30 pounds last year (carcass weight equivalent). While this is still well below Argentina’s per capita consumption of beef (127 pounds) and poultry (97 pounds), beef consumption is well off its highs of the early 2000s and poultry consumption has increased only 18% since 2011.
Brazil is currently Argentina’s primary supplier of imported pork. Last year, Argentina reported imports of just over 35,000 metric tons of pork and pork variety meat, with 32,500 mt sourced from Brazil and the remainder from Denmark, Spain and Italy.
Argentina is about 90% self-sufficient in pork production, but it is the third-largest pork-importing country in South America, behind Chile and Colombia. Based on past performance, the market has room for further import growth, as imports were as high as 47,000 mt in 2011. After reporting very low volumes from 2012 through 2015, Argentina’s imports rebounded to nearly 27,000 mt in 2016 before climbing above 35,000 mt last year.
On a value basis, Argentina’s imports slumped to just $32.1 million in 2014, but trended sharply higher the past three years. In 2017, imports reached $114.4 million, including $101.4 million from Brazil.
Upon entry into Argentina, U.S. pork will be subject to import duties of 10% for fresh/frozen cuts and 16% for processed products. While these rates are fairly modest compared to many countries where the United States does not have a free trade agreement, the duties will present a disadvantage when competing with Brazilian pork, which has duty-free access to Argentina through the Mercosur bloc.
Jessica Julca, USMEF representative in South America, visited Argentina in mid-April to meet with key buyers and to gather more information on Argentina’s import requirements, which include a registration process for the plants from which products originate. USMEF Technical Services Manager Cheyenne McEndaffer is assisting U.S. exporters with these requirements, to help ensure smooth product movement once shipments begin.
Several Argentine importers have been invited to the USMEF Latin American Product Showcase, an annual event that allows U.S. exporters to meet face-to-face with buyers from South America, Central America and the Caribbean at a single location. This year’s showcase is set for June 27-28 in Santo Domingo, Dominican Republic.
“We may have a small turnout from Argentina this first year, given that the market just recently opened,” Julca says, “but there is strong interest from both importers and U.S. exporters and traders, so USMEF looks forward to bringing them together at the product showcase and at future promotional events.”
The addition of Argentina comes at a time when U.S. pork is making tremendous strides in South America. Booming demand in Colombia and Chile and a growing presence in Peru fueled a record performance in 2017, with exports climbing 57% year-over-year in volume (103,987 mt) and 58% in value ($268 million). In the first quarter of this year, exports to South America were up 22% from a year ago in volume (29,126 mt) and were 24% higher in value ($70.8 million).