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Will US Pork Mountain Prove Insurmountable for UK Exports

30 January 2017, at 6:00am

UK - The latest United States forecasts anticipate that pig meat output will reach a record high this year, up by as much as 5 per cent on 2016 to nearly 12 million tonnes.

The forecasts have been revised upwards given the unexpectedly large rise in pig numbers shown by the December pig count. Given these abundant supplies, exports are forecast to rise 4 per cent to almost 2.5 million tonnes. The question is, how much will this extra pig meat threaten the position of other global exporters, such as the EU including the UK?

The USDA export forecast might actually prove to be too low, particularly given the lacklustre demand for pork and strong competition between meats in the US this year. With the domestic market only able to absorb some of the surplus, the pressure to raise exports will inevitably be intense. Shipments already reached a record level during November last year, buoyed by competitive prices. This had a negative impact on the EU’s share of the Asian pork market.

However, EU exporters have so far been somewhat protected by relative strength of the US dollar. The need to licence new processing plants for export, and restrictions to locations Ractopamine-treated pork can be shipped, could provide EU exporters with some respite looking forward.

Overall, it seems inevitable that there will be increased competition between UK/EU pork and US product this year, given the extra 575,000 tonnes of US pig meat expected to be produced. The scale of demand for product in Asia, and in particular China, may be crucial for determining how the market pans out, and in particular what the implications for the UK might be.

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