Pork exports have been a bright spot in the pork industry this year. Strong exports are coming from a number of countries and areas, including Korea, Colombia, Central America and Australia. But the European Union’s massive drop in domestic production is also giving U.S. exports a boost, and some of that drop is a product of environmental regulations.
According to the U.S. Meat Export Federation data, EU’s pork production fell nearly 3 MMT from its peak in 2021.
“When you say 3 million tonnes, it doesn’t sound like a lot, but that’s 25% of our production. They’ve reduced their output by the amount of product that we export,” says Steve Meyer, chief livestock economist of Ever.Ag, who shared during the live taping of U.S. Farm Report during World Pork Expo this week. “So, this is a major shift in world supply situations with the EU stepping back that far. And it’s opened some opportunities, especially in Asia for us, that we can take advantage of.”
Meyer adds the proof is in the pudding, with export dating showing increases of nearly 55% to Korea.
“It’s a big deal, and it’s one of those things where it’s not going back the other way, more than likely,” Meyer says. “In fact, their production is probably going to go down more in the years to come. It’s kind of stabilized this year, but I think they’re going to make sure they’ve made policy decisions that are going to limit their output for years to come.”
EU’s pork production is now the lowest level in nearly 25 years. So, what’s causing pork production to take such a drastic drop? One reason is EU environmental regulations that have forced producers to cut back production. At the same time, EU is also dealing with ingredient supply chain problems and increased input costs. But economists and analysts say the environmental regulations are having the biggest hit to producers there.
“When you look around the world of what’s happened, there have been some major shifts in recent years,” says Brett Stuart, President and co-founder of Global AgriTrends. “The EU is a major competitor, but there have been some regulatory changes that have really caused them to step back from the global markets, which has provided a real in for U.S. pork in a lot of these key markets.”
Erin Borror, vice president of access and analysis for UMSEF, says the export market is a changing one, but it’s also complex. She describes it as a tale of two stories for pork exports.
“We had European products, undercutting us when China pulled back after they rebuilt through ASF, and so we’ve seen a return to U.S. competitiveness,” Borror says. “Our exports are going more volume at higher prices. So, we have seen that demand component. I think that’s really critical to understand.”
She says Europe’s pork prices have also increased after being too low in 2021 and 2022.
“And so there’s that factor in Asia, so especially Korea, Southeast Asia, where we’re seeing that growth, as well in Australia, taking back market share from Europe,” she says. “The other side is here in the Western Hemisphere, and in Latin America, where U.S. pork is driving consumption growth.”
That strong demand is thanks to trade agreements. “When you look at consumption growth in areas of Asia, that’s because of Europe’s production being down,” she says.
“I think there’s some real opportunities ahead, and it’s market by market. These markets are all unique,” Stuart says. “As we look out, I’ve got pork exports forecast up 9% this year, and that might be on the upper end of the range of vast amounts. But I look at it’s not just Mexico or Korea or Colombia. If you look at the other non-top 10 markets, that’s over 80 countries. That market is up 30% year-to-date, and it grew 30% last year. And so it’s not just this handful of markets we hear about a lot.”
