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July Pace Remains Sluggish for US Pork

by 5m Editor
14 September 2009, at 11:07am

US - January through July exports of US pork and beef are lagging behind last year’s pace amid a difficult global economic climate and lingering effects from the H1N1 influenza outbreak.

The most recent statistics released by USDA and compiled by the US Meat Export Federation (USMEF) show pork exports of 1.08 million metric tons (2.38 billion pounds) valued at $2.53 billion. While these totals are a respective 10 per cent and 9 per cent below last year’s record-shattering pace, they are still 53 per cent higher in volume and 48 per cent higher in value than in January-July 2007.

Mexico, Russia demand showing recovery, but exports hurt by China’s ban

Mexico has been a tremendous bright spot for US pork throughout 2009, but the surge in exports to Mexico suffered a setback recently during the H1N1 influenza outbreak. Through April, pork exports to Mexico were running 71 per cent above last year’s pace in terms of volume and were 62 per cent higher in value. The results for May, June and July have been roughly equal to 2008, however, leaving Mexico with totals of 287,687 metric tons (634.2 million pounds) valued at $426.5 million – which is 42 per cent higher than the 2008 volume and 23 per cent higher in value.

"Pork exports to Mexico are still having a terrific year," said USMEF Chairman Jon Caspers, a pork producer from Swaledale, Iowa. "But there’s no question that H1N1 caused a lot of economic disruption in Mexico and created a backlog in pork inventories. Hopefully we’re past the worst of that situation, and can move back toward the level of activity we saw earlier this year."

Japan remains the pacesetter for US pork in terms of value, reaching 259,451 metric tons (572 million pounds) valued at $944.1 million through July. While these results are only slightly above the 2008 volume, they exceed last year’s value by 11 per cent. Other markets showing significant improvement include Australia (up 22 per cent in volume and 21 per cent in value) and the Caribbean (up 42 per cent and 35 per cent, respectively).

Pork exports to China had already slowed significantly prior to the market closing in early May due to H1N1 influenza. Mr Caspers notes, however, that being essentially shut out of this market for the past four months is a setback the pork industry simply cannot afford.

"Our expectations for China were modest for this year, because we knew they would have much higher domestic production," he said. "But being shut off completely from the world’s largest pork-consuming market is a very serious blow for the industry."

There is no relationship between pork consumption and H1N1 influenza, and consumer attitudes toward pork appear to have recovered quickly despite the media’s persistent mislabeling of the virus as “swine flu." But Mr Caspers, who was in China last week for the World Pork Conference, said market research in China reveals that more consumer education is needed on this issue (see USMEF’s 3 September news release for more details).

"Across the entire globe, the pork industry cannot afford to have China’s consumers turning away from our product," he said. "Whether you are a pork producer in Iowa, Indiana, China or Chile, this is a very serious problem. Hopefully we can all work together to provide better information to China’s consumers and turn this situation around."

Pork exports to Russia are also down about 30 per cent compared to last year, due in part to state-specific, H1N1-related market closures in May and June. Exports have also slowed due to the continued delisting of many US pork plants by Russia. The good news, however, is that July pork exports to Russia – 19,625 metric tons (43.3 million pounds) valued at $43.1 million - nearly doubled in volume and more than doubled in value over the June 2009 totals.

US pork exports are also holding up fairly well in terms of per centage of total production. Pork and variety meat exports accounted for 22.8 per cent of January-July production, compared to 24.7 per cent during the same period last year. Muscle cut exports accounted for 18.3 per cent of production, compared to 21.5 per cent in January-July 2008.