September pork exports totaled 394.9 million pounds, carcass weight equivalent. That figure is down roughly 2 per cent from August but is 8.9 per cent lower than one year ago and marks the eighth month out of nine so far this year in which exports have been lower than in 2012. It also marks the eleventh month of the past thirteen in which that has been the case. Year-to-date pork exports stand at 3.649 billion pounds, carcass weight, through September, 8.6 per cent lower than one year ago. September’s export figure is the lowest monthly total so far in 2013.

Note in the chart below that USDA still predicts higher exports in for 2014. Their most recent forecast of 5.27 billion pounds from the November World Supply and Demand Estimates (WASDE) report is slightly lower than the September WASDE figure of 5.31 billion pounds, carcass weight, but it still represents an increase of 4.3 per cent from their most recent 2013 forecast of 5.054 billion pounds.

Among major markets, only Japan (+1.3 per cent) and Mexico (+1.9 per cent) have purchased more US pork this year through September. The increase for exports to Japan is, we believe, particularly noteworthy since the yen that, this week, is 22.6 per cent less valuable versus the dollar than it was one year ago makes US pork commensurately more expensive for Japanese buyers.

Shipments to the Caribbean and “Other” markets have grown by 35 per cent and 13 per cent this year. It should be noted that the “Other” markets used by ERS in compiling these data now account for over 15 per cent of total US exports. While each individual country in that group may be relatively small, they have a significant collective impact on the industry’s export performance. Further, their growth provides some much-needed diversification to the industry’s export customer portfolio.

The drivers of this year’s lower exports are both obvious and familiar to pork industry participants and observers – China/Hong Kong, Russia and Korea. While exports to China/Hong Kong are significantly lower (20.8 per cent) for 2013 to date, those markets have taken 15 per cent and 20.5 per cent more product versus one year ago in August and September. As can be seen in the bottom chart, those values are the highest since May 2012 and represent a continuation of a long-term uptrend that bodes well for the US industry, especially if the Smithfield- Shuanghui deal tilts this trend line upward as we expect it to do.

Shipments to Russia remain at zero with no improvement in sight. This year’s poor exports to Korea are disappointing given the enactment of the Korea Free Trade Agreement but reflect a largerthan- expected resurgence of Korean domestic production following their 2011 hoof and mouth disease outbreak. September exports to Korea were down 68 per cent from last year and bring the year-to-date total to -30.8 per cent. Most observers — including us — expect shipments to Korea to grow as tariffs are reduced under the FTA, making Korea a long-term major destination for US pork.

September’s muscle cut exports were valued at $413.5 million, 4.1 per cent lower than the value of August shipments and 3.3 per cent lower than one year ago. Year-to-date export value stands at $3.749 billion, 7 per cent lower than last year., implying slightly higher unit prices.

US packers/processors shipped 31.9 million pounds of pork variety meats valued at $54.336 million in September. Those figures are 10.2 per cent and 9.7 per cent lower than last year. Variety meat exports are still up 10 per cent in volume and 11.7 per cent in value, year-to-date.

If Russia, China and Korea were at year-ago levels through September, our exports would be 1.8 per cent higher than one year ago.

September’s exports represented 21.4 per cent of total US pork production. Year-to-date, exports have accounted for 21.6 per cent of total US pork production. That figure is lower than the past two years when exports accounted for 22.8 and 23.1 per cent of production. The 2012 figure is the highest on record.