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US Pork Exports Show Strength in First Quarter

by 5m Editor
14 May 2010, at 9:15am

US - US beef and pork muscle cut exports performed well in March, concluding the first quarter of 2010 with increasing momentum.

A sluggish global market for variety meat held down the overall totals, but muscle cut export value for both products are running ahead of their 2009 pace.

Pork muscle cut exports pulled ahead of their 2009 pace by 1 per cent in volume (356,297 metric tons or 785.5 million pounds) and 2 per cent in value ($941.9 million). Combined pork/pork variety meat totals are slightly behind last year in both volume (468,793 metric tons or 1 billion pounds) and value ($1.11 billion).

On a positive note, the value of total pork exports in March edged up 1 per cent compared to March 2009, and it was 18 per cent ahead of the value of pork exports in March 2008, a record-setting year for US pork exports.

Pork exports accounted for 22.5 per cent of total production compared to 25 per cent in March 2009, but muscle cut exports accounted for 19 per cent of production, the same as one year ago. Per-head pork export value equated to $39.80 – which is down about $1 from March 2009.

The results for both beef and pork exports were achieved despite significant declines in each of their leading value markets. Beef exports to Mexico continue to struggle due to weakness in Mexico’s economy. Though beef muscle cut exports managed to pull within 7 per cent in volume and 10 per cent in value of their 2009 pace, variety meat exports to Mexico are still down dramatically.

Pork exports to Japan, which exceeded $1.5 billion in each of the last two calendar years, have slowed due to unusually high inventories of domestic pork. Muscle cut exports to Japan are within 13 per cent in volume and 11 per cent in value of last year’s pace. But while variety meat makes up only a small portion of the US pork shipped to Japan, those exports are down 62 per cent in volume and 46 per cent in value.

US pork exports post solid gains in several markets, but remain slower to Japan

While lower purchasing power in Mexico has created a struggle for US beef, pork exports to Mexico continue to surge. In the first quarter, pork/pork variety meat exports to Mexico topped 100,000 metric tons (220.5 million pounds) valued at nearly $195 million. This was an increase of 24 per cent in volume and 45 per cent in value over last year.

“The growth we have achieved for US pork in Mexico is just terrific,“ said USMEF Chairman Jim Peterson. “About this time last year, we were facing the A-H1N1 crisis and pork demand in Mexico looked like it might be in serious jeopardy. But we worked very hard to educate consumers and the trade there to keep the market open and maintain consumer confidence in our product. As a result, Mexico is now our leading volume market for US pork. And now that prices are improving we’re seeing sustained buying at higher prices, which gives us impressive gains in export value.“

The growth of US pork in Mexico has helped offset this year’s declines in four key markets – Japan, South Korea, Russia and China. The results in Japan and Korea are largely attributable to a spike in domestic pork production, while market access has been a major issue in both Russia and China.

Access to Russia is improving, with excellent progress being made in reinstating US plants that were ineligible for export to Russia in late 2009 and early 2010. Most exports from these plants, however, are not reflected in the first quarter data. Despite an agreement between the United States and China for resumption of US pork exports, no US product has yet entered the country in 2010 as final details regarding import certificates are still being resolved.

In contrast to these markets, US pork has posted impressive first-quarter gains in other regions. Highlights include:

  • Pork/pork variety meat exports to Canada are up 10 per cent in volume (to 43,557 metric tons or 96 million pounds) and 19 per cent in value (to $141.2 million).

  • Exports to Hong Kong reached 64,417 metric tons (142 million pounds) valued at $89.6 million. This is an increase of 52 per cent in volume and 34 per cent in value over last year.

  • The ASEAN region increased its imports of US pork/pork variety meat by 51 per cent, reaching 19,385 metric tons (42.7 million pounds). Value increased by 57 per cent, reaching $43.7 million. The region was led by particularly strong gains in the Philippines and Singapore, while exports to Viet Nam declined significantly.

  • Exports to Taiwan surged by 43 per cent in volume (to 7,943 metric tons or 17.5 million pounds) and 53 per cent in value (to $15.2 million).

  • US pork’s strong momentum in Mexico has also extended to other Western Hemisphere markets. Exports to Central and South America increased 22 per cent in volume (to 15,254 metric tons or 33.6 million pounds) and 25 per cent in value (to $33.8 million). These results were led by strong increases in export value to Honduras and Guatemala.

  • Exports to the European Union climbed 69 per cent in volume (to 5,493 metric tons or 12.1 million pounds) and 49 per cent in value (to $16.4 million).

“Across the globe, we are making strong gains for US pork,“ Mr Peterson said. “When our shipments to Russia recover and we regain access to China, those markets will provide some important growth.

“We also expect Japan to work through its high inventories fairly soon, which will improve conditions for US pork,“ he said. “We have developed so many channels for US pork in Japan, including hotels, restaurants, institutional, retail and processing, so that market will come back strong. For example, in one three-week campaign USMEF developed recently with Japan’s leading retailer, Aeon, 2.6 million pounds of American pork were sold. Through the ‘Aeon Loves US Pork’ campaign, our relationship with Aeon continues to grow.“