USMEF Forecasts 13% Pork Export Growth in 2020

03:22PM Nov 06, 2019
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U.S. Meat Export Federation (USMEF) president and CEO Dan Halstrom says he’s upbeat about beef, pork and lamb exports. Increased momentum in the second half of 2019 combined with record production has the U.S. red meat industry on track for record exports. 

USMEF is forecasting pork export growth at 10% or higher for 2019 and 13% for 2020. 

“Believe me, I think these are conservative numbers and they could well be higher depending on what happens to some of the key markets later this year,” Halstrom says. 

Beef exports are expected to stay even for 2019 on a volume basis, but USMEF predicts 5% growth in 2020. 

Optimism abounds in Japan
The U.S.-Japan trade agreement is expected to be approved by Japan’s parliament in time for a Jan. 1 implementation. Halstrom says he’s very optimistic about the impact this will have on U.S. red meat exports to Japan as the U.S. gets on a level playing field with major competitors such as Australia, Canada and Mexico. 

“We feel like this is going to enable us to move the needle even further and regain some of that share that’s been lost on the pork side and some of the share of lost opportunity on the beef side,” Halstrom says. “We're going to be very aggressive in all the major sectors.”

USMCA holds important key to export success
Getting USMCA approved will be a critical step forward. Halstrom says USMEF and its members are optimistic about getting this agreement through the House.

Mexico is an important export partner for the U.S. Currently, Mexico is the No. 1 lamb market, No. 1 pork market and No. 3 beef market to the tune of about $2.4 billion in sales last year, he adds. 

“I think an even more important factor is from a product standpoint,” he says. “They want a different set of products for the most part as compared to Asia. From a carcass utilization standpoint, having unobstructed access in Asia as well as Mexico and Canada for that matter is very key for our business.”

China market grows despite trade barriers
African swine fever (ASF) has devastated China’s pork supply this year. With record-high pork exports to China in July and August, Halstrom is optimistic this trend should continue the rest of this year and into early next year.

But there’s no question that exports would be much greater if U.S. pork was not facing a 72% duty as compared to the 12% duty our competitors face, says Joel Haggard, USMEF senior vice president, Asia Pacific.
Haggard says the U.S. currently has a 13% market share in China for January-September 2019, but he believes that number could be much higher. 

“The price spike for China live hogs and pork didn’t start until August and if you look at China’s Ministry of Agriculture reports, average pork prices have gone up over 80% since August. That’s an incredible increase,” Haggard says. “It makes U.S. pork still viable even with the 72% duty – but we are the supplier of last resort because of that duty.”

However, he is adamant that the U.S. is also the supplier that could grow. USMEF says the U.S. pork industry could export up to 1.6 million metric tons of pork to China in 2020 if trade barriers are removed as compared to the 220,000 metric tons the U.S. sent to China in 2018. 

Pork export growth down in South Korea 
From January to August, the U.S. exported 136,000 metric tons to Korea, down 8% from a year ago. Jihae Yang, USMEF-Korea director, says although this shows negative growth this year, U.S. pork exports last year had increased by almost 40% from 2017. 

“This year is kind of an adjusting period, managing inventory,” Yang says. “U.S. market share in Korea recorded 35% market share and it will continue to grow while the European countries are focusing on the China market.”

Pork producers in South Korea claim losses of up to $130 a head, Yang says. Domestic pork prices in South Korea have fallen because of consumer fears over ASF, even though it is not a human health concern and poses no food safety risk. Pork producers and the government continue to deliver the message that pork is safe to eat.

Developing regions are key
And how do developing regions of the world fit into USMEF’s plans? Halstrom says they are key.  Developing regions such as Central America, South America, Southeast Asia and Africa are just a few key regions where USMEF is seeing progress. 

The Philippines and Vietnam, which have been impacted by ASF, provide great potential as export markets, especially with secondary cuts and primary cuts.

"We really need to look at the entire world and maximize the value. I think that's something USMEF is doing every day,” Halstrom says. 

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