Coming off a tremendous, record year in 2020, U.S. pork exports faced a daunting task in 2021: how to match that performance despite slowing demand from the world's largest importer – China.
Up to the plate stepped Mexico, which prior to the surge in exports to China had traditionally been the leading volume destination for U.S. pork. But demand had softened in recent years due to tariffs, heightened competition and COVID-related slowdowns in foodservice and processing activity. U.S. pork exports to Mexico peaked in 2017, topping 800,000 metric tons valued at more than $1.5 billion. At the time, this was not just a new record for U.S. pork to Mexico – it was the largest volume any pork-exporting country had ever shipped to a single destination.
2018 began as a promising year for U.S. pork in Mexico, but hit a major mid-year obstacle when Mexican officials imposed a 20% duty on most imports of U.S. pork. The duties were in place for nearly a full year, finally being lifted in late May 2019. The pork import duties affected Mexico's demand for U.S. pork on several fronts and the direct impact on pricing incentivized Mexican buyers to seek alternative suppliers, including those from Canada and Europe.
Removal of the duties and subsequent ratification of the new U.S.-Mexico-Canada Agreement paved the way for a rebound in demand for U.S. pork, but this momentum was interrupted by the COVID pandemic. Mexico's tourism and hospitality sectors were hit especially hard, and its meat processors faced labor shortages and significant distribution challenges. These factors, along with surging demand from China, contributed to a down year in 2020 as U.S. exports to Mexico fell to the lowest level (688,000 mt) since 2014.
While the pandemic continued to impact Mexico's economy in 2021, social distancing restrictions were far less stringent and consumer demand for pork regained momentum – especially at the retail level. With support from the National Pork Board and the USDA Market Access Program, the U.S. Meat Export Federation expanded consumer outreach efforts through social media and online sales and delivery platforms – capitalizing on consumers' desire for more high-quality meal options to prepare at home.
"Many consumers in Mexico rediscovered the joy of cooking at home, and U.S. pork offers many affordable, flavorful meat options," says Gerardo Rodriguez, USMEF marketing director for Mexico, Central America and the Dominican Republic. "The modern supermarkets such as Walmart and Soriana are excellent venues for featuring U.S. pork, especially when we can connect with consumers through digital platforms to let them know which products are available. Mexico has also seen outstanding growth in 'club' stores such as Sam's Club and Costco, which serve everyday consumers as well as many family-owned foodservice outlets."
Rodriguez notes that Mexican consumers also have a heightened interest in preparing healthy meals at home, and U.S. pork is also a great fit to incorporate into a heathy eating plan.
"Over the past 18 to 24 months, interest in healthy preparation techniques has surged, which creates a great opportunity for USMEF to showcase the nutritional attributes of U.S. pork and how it may fit into healthful eating patterns," he says. "Consumers are becoming more knowledgeable and more demanding about the quality of the proteins they purchase, seeking the best options for their family. This makes U.S. pork a very appealing choice."
Similar to many countries throughout the world, Mexico's foodservice sector has adapted to consumers' desire for options other than traditional sit-down dining.
"USMEF has worked with partners in the home delivery business to make U.S. pork a shining star at foodservice," Rodriguez says. "Takeout and delivery options simply exploded in Mexico when restaurants were closed or restricted, and we see this trend continuing well beyond the pandemic."
Mexico has long been a leading destination for U.S. hams and picnics, but the strides made at retail and foodservice have helped expand the range of pork cuts entering the market. USMEF has placed particular emphasis on the promotion of loin cuts as a center-of-the-plate option offering tremendous value and convenience for in-home dining, as well as quality and variety for restaurant menus.
The expanded product mix entering Mexico helped push 2021 exports to new heights. Through November, according to USDA data compiled by USMEF, exports totaled nearly 795,000 mt, up 29% from a year ago and gaining fast on the previous annual volume record of 802,000 mt. Export value through November surged 51% to $1.54 billion – already exceeding the 2017 record.
Export growth to Mexico has been a critical component in the effort to keep total U.S. pork exports on pace with the record level of 2020. Through November, total U.S. pork exports reached 2.7 million mt worth $7.5 billion.
"Mexico has been a reliable trading partner for the U.S. pork industry for many years and we greatly value our relationship with longtime customers, including processors, distributors, retailers and foodservice operators," Rodriquez says. "It is very gratifying to witness pork demand stage such an impressive rebound in Mexico, and we see outstanding opportunities for further growth."