Optimism cools for pork exports to China

U.S. pork needs to be promoted in China to capitalize on our global leadership in quality and price to capture additional market share in that region.

Kent Bang Compeer Financial, Vice President of Swine Lending

February 19, 2020

2 Min Read
Pork in a Chinese market
Getty Images

I spent some time this week reading and analyzing the USDA report Livestock and Poultry: World Markets and Trade. This latest release covers major global meat producers and consumers and makes estimates on trade.

Pork production in China is now estimated to be down 7.585 million metric tons (14%) in 2019 and down an additional 10.529 mmt (23%) in 2020. Surprising to me, based on their estimates of domestic consumption in China and Hong Kong, the USDA expects consumption to fall by 5.459 mmt (10%) in 2019 and an additional 9.434 mmt (19%) in 2020.

Table: The pork shortfall in China, based on the USDA numbers, in million metric tons.

While they are big numbers and increasing by threefold over two years is huge, it falls short of what I anticipated for imported pork demand. The total increase from 2018 to 2020 would be 2.119 million metric tons (equivalent to 22.3 million head at 210-pound carcass weight).

Global export volume growth is projected to be supplied by the European Union (967,000 metric tons), the United States (556,000 mt), Brazil (270,000 mt) and Canada (69,000 mt). The estimate of U.S. pork export growth of 21% over two years is concerning. That would leave us with an estimated 4.3% more pork to consume domestically over the two years (2019 and 2020).

These estimates come from a few sources. Canada is exporting more to China after removing export restrictions in late 2019. Mexico's weak economy is slowing gains in pork consumption. In the Philippines, we're seeing lower than expected losses from African swine fever. Most importantly, Chinese pork production has been revised higher on much heavier carcass weights, and to a lesser extent, slaughter numbers.

China's meat consumption will be lower, and demand will be curtailed due to availability and price. USDA estimates that consumption of pork will be lower by 18.114 mmt (-33.4%) and offset by increased chicken consumption of 3.525 mmt (+30.4%) and increased beef consumption of 1.24 mmt (+61.9%). Fish consumption is not covered here and will likely see increases as well.

Our need is to make sure that we are doing what we can as an industry to promote U.S. pork in China and capitalize on our global leadership in quality and price in order to capture additional market share in that region.

Source: Kent Bang, who is solely responsible for the information provided, and wholly owns the information. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.

About the Author(s)

Kent Bang Compeer Financial

Vice President of Swine Lending, Compeer Financial

Kent Bang serves as the vice president of Swine Lending at Compeer Financial. He has more than 35 years of experience in the swine industry, with the last 20 years spent financing large commercial swine production and pork processing. Prior to that time, Bang consulted clients across the United States in production, finance and nutrition for two leading feed companies. Bang graduated from the University of Nebraska with a bachelor’s degree in animal science and ag business.

Bang has been active in the swine industry as a long-time member of the Pork Alliance and currently serves on the board of directors for the National Pork Producers Council. He and his wife, Julie, live in Omaha, Neb., and have two adult sons.

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