Competition to supply world with pork is heating up

Russia, United States, Mexico, China and Canada are countries that are in the top 10 importers and exporters.

June 7, 2017

6 Min Read
Competition to supply world with pork is heating up
National Pork Board

Pork is the most consumed animal protein around the globe. As the world population climbs along with disposable income, the competition to supply the world with wholesome, safe pork is heating up.

Together, the world’s pig farmers produced 108.2 million metric tons of pork last year, according to the USDA Foreign Agricultural Service. China, the European Union, the United States, Brazil and Russia lead the way, supplying 86% of the total production worldwide.

Pig farming is all about selling pork. It is not about selling individual animals but raising delicious pork for the global table, and that all starts with the sow. The production and efficiency of the sow is quintessential to the success of the swine business. She has one job — to deliver the best pigs that perform well.

Regardless of the geographic location, the pork supply chain begins with an investment in the sow through solid genetics, precise nutrition and high-performance facilities that enhance efficient growth.

The global swine business demographics are transforming. Currently, the majority of the world’s pork producers are in some form of expansion mode as the largest pork-producing country, China, is shifting to grander, more efficient operation.

Sow production is a serious business for pork producers worldwide, and National Hog Farmer recognizes its significance to global pork trade. The Global Mega Producer is a comprehensive picture of the worldwide pork industry, highlighting the minority that own more than 100,000 sows.

It takes all pig producers, processors and business partners to provide pork for the people around the globe, especially as the mouths to feed will grow substantially. The size of the operation does not define the quality of pork produced.

However, hogs are moving around the globe. The herd size in pork-producing countries is fluctuating with overall growth in the world’s pig population. In order to be a significant player in the pork export game, it pays to identify the players in the world’s pork industry.

The Global Mega Producer list presents a global snapshot, illustrating the shifts in pork production. In the following pages, you will find the interconnected world of pork production. Where is the pork being produced around the globe? Who is eating the pork? These are all questions we examine in this special project, the Global Mega Producer.

Feeding global consumers

Today’s pig farmers not only compete locally, but also internationally. Supplying the world with pork is not without competition. Looking at the big picture, all the major pork-producing countries want to grow their market footprint. For the majority of these countries, the export market is essential to increasing sales and supporting hog prices across the globe.

Overall, global pork trade in 2017 is stable, with a boost in production from the United States being mainly absorbed by main import markets in Asia, supporting international hog prices according to a recent global pork quarterly report by Rabo-Research Food & Agribusiness.

In the past five years, world pork production has increased by 3.854 million mt with the United States contributing to the largest growth at 1.290 million mt. European Union production climbed 924,000 mt, Russia’s production was up 825,000 mt and Vietnam’s production increased by 443,000 mt compared to five years ago.

The EU leads the way exporting 45% of the world’s pork, with the United States coming in second at 27%, followed by Canada at 14% and Brazil at 9%. Currently, the EU pork industry is thriving with record exports through February 2017. However, climbing hog prices are slowing down the pace and limiting its competitiveness. The spread between the United States and the EU is the widest since 2009, reports the U.S. Meat Export Federation. “The EU continues to be very aggressive in its pursuit of new trade agreements and in its efforts to modernize existing agreements — some of which are with large pork-importing countries,” states Joe Schuele, USMEF vice president of communications.

Brazil is quietly building it global pork foothold with increases in all the main markets, specifically China. Also, a favorable currency and export-focused industry, Canada’s pork sector is performing well this year, notes Rabobank.

While China produces the most pork, it also consumes the most. Importing 40% of total pork, China is the most sought after market. Market experts estimate that China will import 3 million tons of pork this year, as the country recovers from a massive reduction in sow numbers and the government promotes larger production models.

Rising consumption in the second and third largest importers of pork is good news for exporters. Japan’s appetite for pork increased for the third year in a row while its domestic production declined. In the first quarter of 2017, Rabobank reports pork exports to Japan from the United States, Canada and Mexico grew 8%, 11% and 13%, respectively, whereas pork shipments from the EU remain flat.

Pork consumption for the third largest importer of pork — Mexico — is anticipated to grow 2.8% this year. For the winter of 2017, Mexico hog producers battled another round of porcine epidemic diarrhea virus hindering pork production, but the impact thus far is not as harmful as the outbreak in 2016. According to Rabobank analysts, Mexico’s pork imports are already at a record high this year. Trade discussion between the United States and Mexico could open the door for other pork-producing countries to capture a share of the marketplace.

The global pork landscape is changing to serve the demands of the consumer worldwide. Gone are the days of producing as much pork as possible and selling it to the highest bidder with productivity, volume and price of an increasingly “lean” product being the key variables.

Traditional marketing programs are going by the wayside. Consumers are asking for full tracking of the supply chain from farm to table and the story behind producing the pork on their fork, notes Rabobank. So, pig farmers from around the global are struggling with supplying the changing consumers’ demand while producing pork within restrictive government regulations.

Keeping pork at the center of the plate comes down to taste, price and safety. Research after research shows that consumers select food items based on taste and price with the safety of the product trumping all other preferences.

The future of selling pork around the globe is the quality behind the brand and understanding the consumer. Philip Seng, president and chief executive officer of the USMEF, says, “It used to be when we talked about pork internationally we talked about all the nutrients. There are a lot of consumers that define the food they eat by what is not in the food they eat.”

In order to sell pork worldwide, Seng says you have to understand the mind of the consumer and the retailers’ policy that reacts to the consumer or actually shapes the minds of their shoppers in the targeted marketplace. Each global market has unique consumers along with retail standards.

U.S. hog farmers can produce pork efficiently and safely. Returning customers — Mexico and Japan — are a testament to the consumer response to U.S. pork. Excellent production and modest growth are driving more pounds of pork to sell. While production numbers seem to be hard to pinpoint, demand is remaining strong, with exports jumping 18% in the first two months of this year.

Producing the pork is not a problem for U.S. hog farmers. The effort is to sell the extra pounds of meat — a task all pork exporters want to accomplish. Each country has its barriers in foreign markets. Some countries have price advantages while others have the right product for the right market. Moving forward, one thing is certain — the competition is not going away, and it will take being on top of the game to compete successfully.



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