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Soybean Producers Unite to Support Pork Exports

Seeing U.S. pork exports dampened by a sluggish global economy, hog prices stuck below breakeven levels and access issues in key markets, soybean producers banded together at the end of 2009 to underwrite an aggressive U.S. Meat Export Federation (USMEF) initiative to bolster pork exports and improve the economic outlook for one of its most valuable customers, the U.S. pork industry.

Seeing U.S. pork exports dampened by a sluggish global economy, hog prices stuck below breakeven levels and access issues in key markets, soybean producers banded together at the end of 2009 to underwrite an aggressive U.S. Meat Export Federation (USMEF) initiative to bolster pork exports and improve the economic outlook for one of its most valuable customers, the U.S. pork industry.

While the full impact of this “Pork Stimulus Package” will not be known for several months, the early indications are that this joint effort by the Minnesota Soybean Research and Promotion Council (MSR&PC), Nebraska Soybean Board, South Dakota Soybean Research and Promotion Council and United Soybean Board (USB) will provide a boost for the industry in several key export markets in 2010.

The Minnesota contingent (MSR&PC) got the ball rolling by volunteering to invest an additional $800,000 toward USMEF promotions in Japan and Mexico at the end of 2009 and the first quarter of 2010. The Nebraska Soybean Board soon stepped forward with a commitment of $200,000 toward the same Japan/Mexico effort. The Pork Stimulus Package gained further momentum when USB added $250,000 for pork marketing programs in South Korea and the South Dakota Soybean Research and Promotion Council made an additional investment of $100,000.

“Our leadership identified pork exports as a key factor in our industry’s success. So we turned to USMEF and challenged them to present us with an emergency proposal that would make an immediate impact – and they met that challenge exceptionally well,” said MSR&PC Executive Director Jim Palmer. “But knowing that more money would still be needed, we reached out to the national program and to our peer organizations for additional funding and we were very impressed and appreciative of what USB, Nebraska and South Dakota were able to contribute.”

Together, these organizations contributed $1.35 million in soybean checkoff funding to support pork marketing programs in the three key international markets. The purchasing power of the soybean industry’s investment will actually exceed $4 million because USMEF is able to use these funds to leverage support from the USDA’s Market Access Program and Foreign Market Development program, third-party contributions and other non-checkoff funds.

The three countries targeted for the additional funding are Mexico and Japan, the top two markets in both volume and value for U.S. pork, and South Korea, which is sixth but offers considerable potential for growth. Even though pork exports were affected globally by the economic downturn and concerns related to the H1N1 virus, U.S. exports to Japan for 2009 are on pace to match the all-time single-market value record (set in 2008) of $1.54 billion, and exports to Mexico have already set a new yearly volume record and should easily surpass this market’s previous value record of $692 million (also set in 2008). South Korea was severely affected by the economic downturn, but still imported more than 213 million pounds of U.S. pork valued at more than $200 million in the first 11 months of 2009.

Pork Back Ribs a Big Hit
One of the key marketing initiatives funded by the additional soybean industry support is the introduction of U.S. pork back ribs in Japan. The product drew immediate interest from key Japanese buyers and major national retailers. USMEF took an innovative approach to the rollout, working with cooking instructors and chefs to develop recipes that worked in Japanese kitchens and fit with local cuisine.

At the foodservice level, USMEF conducted a baby back rib promotion with Guru Navi Gourmet Navigator, Japan’s most popular restaurant Web site, which draws more than 850 million visitors per month. Many of the restaurants participating in this promotion decided to add pork back ribs to their permanent menus.

The introduction of U.S. pork back ribs in Japan also has been an unqualified retail success, with more than 1,500 of the country’s supermarkets now selling them. When year-end results are tabulated, the USMEF staff in Tokyo expects to have sold about 220,000 lb. of back ribs during December holiday promotions alone and about 660,000 lb. in the fourth quarter of 2009.

Pork Sales in Mexico Climb
One promotion at 20 San Francisco de Asis supermarkets in Merida and Campeche in southern Mexico boosted sales of four targeted pork cuts (pork Milanesa, boneless and bone-in pork legs, and pork shoulder/picnic) by 155,620 lb. – a 28.6% increase over the previous year’s sales in the same period from Thanksgiving through New Year’s. The stores sold just under 700,000 lb. of U.S. pork during the promotion.

USMEF-Mexico sponsored in-store demonstrators to enable shoppers to sample products, and provided incentives for volume purchases: a 2010 pocket calendar for all purchasers and a 2010 kitchen calendar with monthly pork recipes for those who bought a minimum of 5 kilos (11 lb.) of U.S. pork.

Mexico’s fourth-largest retailer, Chedraui, participated in a similar promotion with 46 of its supermarkets in eastern and southern Mexico. The promotion moved nearly 2.4 million pounds of U.S. pork, an increase of almost 143,000 lb. (6.3%) over last year. The cuts targeted for promotion at Chedraui were bone-in and boneless pork loins, pork kabobs, pork steak and chopped pork.

Another holiday promotion at 82 Commercial Mexicana supermarkets throughout the country sparked an 8.6% jump in sales of boneless pork leg and pork Milanesa, equaling a sales increase of 26,525 lb. over the previous year for a total of nearly 340,000 lb. during the promotion.

Korean Pork Sales Recover
While exports to South Korea are still below their 2008 pace, they have recovered nicely in recent weeks. Fueled by a USMEF advertising campaign aimed at establishing U.S. pork as a year-round entrée and other successful fine dining and quick service restaurant promotions, November pork exports to Korea reached their highest level since April at $20.4 million. This was 25% above the October total and more than 80% above the monthly values achieved in September and August.

Highlighting the attributes and benefits of U.S. pork, USMEF-Korea launched a “Pork Story” Web site. A drawing to win free pork products drew more than 500 consumer applications within two weeks, with many posting their own recipes using U.S. pork and recommendations for restaurants serving U.S. pork. Many of the winners posted follow-up notes describing how they prepared – and enjoyed – their U.S. pork dinners.

Among the program activities in progress and planned for the coming weeks, USMEF-Korea will be collaborating with retail giant E-Mart on a promotion at 124 outlets and tasting demonstrations at 15 of E-Mart’s best-selling stores, for a total number of 150 sample demonstration days. While USMEF will produce 15,000 give-away items for the promotion, E-Mart will absorb the cost of printing U.S. pork promotion information on its regular sales inserts. Additionally, a new U.S. pork cookbook is being developed.

“As the United Soybean Board looked for funding opportunities that would deliver a strong return on investment, the additional pork marketing efforts in Korea really stood out,” said USB Chief Executive Officer John Becherer. “For the soybean producers who establish our funding priorities, it all comes down to getting a strong return on their investment by increasing demand for our product. Stimulating pork exports to Korea certainly fulfills that objective.”

Jim Herlihy
VP of Communications
U.S. Meat Export Federation