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Market Preview: Think COOL, Exports and Pork Quality

by 5m Editor
20 December 2008, at 8:13am

US - Weekly US Market Preview provided by Steve R. Meyer, Ph.D., Paragon Economics, Inc.

US livestock producers should not be surprised that Canada’s beef and pork producers are trying to make lemonade out of the lemons that the US mandatory country-of-origin labeling (COOL) law sent their way. Figure 1 shows an ad that is running in meat trade publications. It features Canadian beef, but the referenced website (meatcool.info) makes it plain that Canada’s pork industry is heavily involved in this effort.

Kudos to both groups. Legendary University of Texas football coach Darrell Royal was famous for saying one should “dance with who brung you.” Translated to normal English, that means “take advantage of your strengths.” I think it is applicable for the Canadians, even though they may not be very happy about “who brung” them to this dance. And lest US producers think this will never work, go to the local grocery store and see how much New Zealand-labeled lamb is in the case. Better yet, see how much lamb you can find that does NOT carry a New Zealand label.

Exports Stay Strong

USDA released October export data last week and they again indicated stellar performance by the U.S. pork industry. See Figure 2 for monthly carcass weight shipments and Figure 3 for year-to-date product weight data.

While not the double year-ago levels we saw this past summer, October shipments were 17 per cent higher than those of September, 30 per cent higher than one year ago and leave year-to-date pork exports up a remarkable 61 per cent from 2007.

China/Hong Kong is the clear leader in percentage growth at 222 per cent. Shipments to Russia slowed in October and were only 25 per cent higher than last year. But year-to-date shipments to Russia remain 121 per cent larger than in 2007.

Perhaps most important, shipments to our historically largest customers, Japan and Mexico, have seen healthy increases this year as well, and that growth continued in October. October shipments to those markets were up 29 per cent and 108 per cent, respectively, from last October, bringing year-to-date shipments to the two markets to +23 per cent and +50 per cent, respectively. October shipments to Canada were 4 per cent smaller than last year as US pork prices rose with the strengthening of the US dollar relative to the Canadian dollar. But shipments to Canada thus far in 2008 are still 19 per cent larger than last year.

The total value of US pork shipments stands at $3.505 billion through October, up 59 per cent from last year. The value of pork variety meat shipments through October was $450 million, 106 per cent larger than last year. The total of these items, $3.955 billion, amounts to $40.78 for each hog slaughtered in the US through October.

The “Pork Quality” Sermon

A wonderful pastor of a wonderful church we used to attend would periodically begin a sermon with the statement: “It’s time to have one of THOSE conversations again.” The word “those” was very heavily emphasized. The sermon topic, of course, would be sex, fidelity, truthfulness, tithing, etc. You’re probably familiar with those pastors – they make you uncomfortable even if you haven’t committed that particular transgression recently or even at all!

No, I’m not going to launch into a sermon about sex. But we do need to have one of THOSE conversations.

Last week I bought a boneless pork loin from a major retailer. It came from one of our large packing companies and was not pumped. I was using it to make chili and another Mexican soup. I really prefer diced meat to ground meat in these dishes and there is no better value than boneless pork loin – virtually no waste, convenient, low-cost, etc. When I cut up my pork loin, I noticed that it was just shy of PSE – pale, soft but not really exudative. I was not a happy camper and my concern was borne out when I began preparing my dishes.

As part of the prep, I like to brown the cubed pork to caramelize the outside. Guy Fieri (pork spokesman and host of The Food Channel’s Guy’s Big Bite and Diners, Drive-ins and Dives – my favorite TV show) and other chefs on television tell me it adds flavor to the dish. I think it actually does, but regardless of whether that is really true, it makes me feel like a famous chef. So, I do it.

When I tried to brown this less-than-stellar product, I ended up with soup in my skillet. Remember that this loin was not pumped, so this liquid was not the pump releasing into my skillet. It was the meat juices that should have been staying inside the chunks. I was now an even unhappier camper. To caramelize the meat, I had to pour off the liquid.

Here is the kicker. I had several pork chops in the freezer from one of my daughter’s 4-H pigs that needed to be used. They were much better colored and firmer and when I cooked them, they caramelized perfectly. No soup before I wanted soup.

The moral of this story is this – we still have quality problems! My chili and soup turned out fine because I could use the meat juices. But had I cooked that meat on a grill, it would have been very difficult to end up with anything short of shoe leather.

I have many times lamented that we have trained consumers to only buy boneless loins at $1.98/lb. After this experience, I may have discovered why – that’s all they may be worth!

Whether this issue was caused by genetics, animal handling, DDGS or whatever, the pork industry must keep working to improve both functional and specification quality. We can’t ask for more money for our pork without delivering more value, more consistently.