Escalating trade tensions as President Trump adds another round of retaliatory tariffs on Chinese products, are further pressuring grain futures.
Despite that situation, pork exports have held up surprisingly well, according to analysts.
“If you look at pork in particular, where tariffs have been the most influential, we’re in a situation where we’re up 2% in terms of the volume of pork exports so far this year,” said Scott Brown, University of Missouri FAPRI economist, told U.S. Farm Report host Tyne Morgan.
Down But Not Out of the Mexican Market
“When you look at Mexico in particular, the value side has been down double digits, in terms of value of pork exports,” he said. “That’s what’s really hurt our producers…the value side just translates into lower hog prices.”
Despite current trade negotiations, Mexico continues to purchase some products—it’s a nearby market with well established purchase arrangements.
And, if bilateral trade agreements are made, Brown said getting rid of the tariff should help U.S. producers receive more for cuts like ham. “That ought to return additional dollars to producers here,” he said.
Meanwhile, countries such as South Korea and Japan—traditional pork customers—are stepping up to take additional U.S. pork.
Looking ahead to the Hogs and Pigs report due out this week, Brown forecasts another quarter of higher sow inventories. “I still think the supply side is still an issue we have to be paying attention to. It takes a lot of growth in exports to offset what’s going to be another 3% or 4% growth in pork production in 2019,” Brown said.