Momentum builds for U.S. pork in Mexico and China

Although held back by China’s retaliatory duties on U.S. pork, exports to China/Hong Kong contributed mightily to the July volume and value records.

 

Source: U.S. Meat Export Federation (USMEF)

via National Hog Farmer - Sep 06, 2019

 

July U.S. pork exports reached record levels, while beef exports remained relatively steady with last year’s results, according to data released by USDA and compiled by the U.S. Meat Export Federation. July pork exports surged to 233,242 metric tons, up 32% year-over-year and topping the previous record from April 2018, with Mexico and China/Hong Kong leading the demand.

 

Export value was $623.3 million, up 34% and breaking the previous high reached in November 2017. These results pushed January-July exports 2% ahead of last year’s pace at 1.48 million mt while value was down 2% at $3.77 billion.

 

Pork export value averaged $58.92 per head slaughtered in July, up 22% from a year ago and the highest in five years. January-July export value averaged $51.33 per head, down 5% from the same period last year. July exports accounted for 29.3% of total U.S. pork production (up from 24.7% a year ago and the highest since April 2018) and 25.9% for muscle cuts only (up from 21.7% and the highest ratio in five years). For January through July, exports accounted for 26.3% of total pork production and 22.9% for muscle cuts (down from 27% and 23.3%, respectively, a year ago).

 

Since Mexico lifted its 20% retaliatory duty on U.S. pork in late-May, exports have rebounded significantly. In July, exports to Mexico reached 67,161 mt, up 19% from a year ago, while value surged 38% to $126.7 million. January-July results still trail last year by 12% in volume (411,944 mt) and 14% in value ($700.7 million), but exports to Mexico are well-positioned for a strong second half of 2019.

 

“USMEF anticipated a rebound in Mexico once duty-free status was restored for U.S. pork,” says USMEF president and CEO Dan Halstrom. “But I want to emphasize that we did not take this recovery for granted. While those retaliatory duties were in place, USMEF ramped up our outreach with processors and other major buyers in Mexico and worked closely with them to keep product moving south, and with the duties removed we're seeing the results of these efforts. Now ratification of the U.S.-Mexico-Canada Agreement is critical to ensure long-term duty-free access to this key market.”

 

Although held back by China’s retaliatory duties on U.S. pork, exports to China/Hong Kong contributed mightily to the July volume and value records. Exports to the region were a record 68,657 mt in July, more than tripling from a year ago, while value climbed 173% to a record $152.5 million. For January through July, exports to China/Hong Kong were up 23% in volume (292,666 mt) and 3% in value ($580.3 million). China’s hog prices soared to record levels in August, and retail pork and poultry prices are also trending sharply higher as China’s African swine fever-related hog shortage intensifies.

 

In leading value market Japan, where no new duties have been imposed but U.S. pork faces higher tariff rates than its competitors, July exports were steady with last year at 31,019 mt, while value was up 5% to $133.2 million. Through July, exports to Japan were down 3% in volume (222,300 mt) and 4% in value ($906.7 million). The White House recently announced an agreement in principle with Japan that is expected to bring tariffs on U.S. pork and beef in line with competitors’ rates, but the agreement still must be finalized and the timeline for implementation is not yet known.

 

Other January-July highlights for U.S. pork include:

 

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