CME: An Awful Year for Pork Exports

Pork exports were still far below the levels of July 2008 but, as can be seen at right, were closer than at any time since March. Beef exports were slightly lower than in June and sharply below year-ago levels. Shipments to Japan were higher than in July 2008 but trade with Mexico and Canada were lower and shipments to Russia were down nearly 75 per cent.

Pork exports, of course, have looked awful this year because they have been compared to last year’s phenomenal summer performance. Recall that pork exports for all of 2008 were 49 per cent higher than the year before, establishing the 15th straight record for the industry and accounting for 20 per cent of total carcass-weight pork production. There was little hope that this year’s exports would reach those levels and they certainly have not. But July’s totals were impressive given the circumstances — and were 62 per cent larger than July 2007 export totals. We have argued all along that a reasonable goal for this year is to stay at or above the trend based on 2004-2007 data.

The following shows that July shipments were well above that trend and have put YTD 2009 exports 5.2 per cent above the trend as well. No one is happy with exports that are 19 per cent lower than last year but a bit of realism tells us that is not a terrible result when the longer term is considered.

Through July, the star market for US pork exports is — MEXICO at +35 per cent for the year. While recent months have not been as good as January-March, the rebound has been rapid and relatively large considering the hit that Mexican pork demand took in late April. Japan is virtually even with year-ago shipments at the end of March while China/Hong Kong is down 72 per cent and Russia is down 30 per cent for the year.