Pork Exports Continue to Soar in April, Shipments to Mexico Smash Records for 2023

U.S. pork producers are faced with record-high input costs but depleted cash hog prices. The one bright spot for the U.S. pork industry is currently pork exports, with U.S. Meat Export Federation (USMEF) reporting another strong pork export performance in April.

USMEF says April pork and pork variety meats exports increased 15% year-over-year in April. When you look at the totals for January through April, exports are up 14.5% so far this year.

While April’s pork exports were slightly lower than March, USMEF says the change was expected, especially considering March was the 9th highest month ever for U.S. pork exports. 

“International demand continues to be a positive for the entire pork supply chain,” says USMEF President and CEO Dan Halstrom. “While Mexico remains a star performer for U.S. pork, it’s really encouraging to see growth in many markets. Latin American demand has remained strong while the momentum for U.S. pork into the Asia Pacific region has also been increasing. This is critical for maximizing carcass value and generating revenue for an industry that is facing difficult economic conditions.”

USMEF says pork exports to Mexico soared to another record pace in 2023 and April was again a strong month, with volume increasing 9% year-over-year to 80,214 mt, valued at $149.6 million (up 7%).

Good Variety of Growth

USMEF says the export growth for pork is broad-based growth, which means the U.S. pork industry isn’t relying on China or other pork powerhouses to fuel the growing hunger worldwide.

“The exciting part to me is that the growth is widespread,” says Erin Borror, USMEF vice president for economist analysis. “I mean, there are times when you can say ‘Oh, that was all Mexico,’ or whoever it is. But right now, it is really widespread, broad-based growth, and that's positive for several reasons.”

Borror says Latin America continues to be a strong market, which has been the case for the past couple of years. The other reason the widespread growth in exports is so important is because of the continued slowdown in exports to China.

Borrow says the story so far in 2023 is the fact pork shipments are reversing course from last year when Europe flooded the market with cheap pork, which ate into the U.S. export share worldwide.

“Europe's production has dropped so much that it is now more than offsetting the sluggish China market,” she says. “Europe has less availability to export into all the other markets outside China. And that's where they had taken our market share. We're now taking it back, and so this is vast, including Korea, Japan, Taiwan, Philippines, Malaysia and Australia. That whole long list is now buying more U.S. pork, and while we are more competitive than Europe, we're able to sell at relatively strong prices.”

Borror attributes the continued strength in prices to the strength in exports to Latin America.

“You have these competing bids for similar items, and that is helping to drive that value. So, if you look at the cutout, our hams, butts, and even the loin complex to some extent, those have stayed pretty strong. And that export demand is helping to support that part of the cut out,” Borror adds.

To break down the latest export data, USMEF says:

• For January through April, shipments to Mexico topped last year by 10% in volume (350,270 mt) and 27% in value ($691.3 million).
• April pork exports to South Korea totaled 21,336 mt, up 42% from a year ago and the largest since May 2019, while export value climbed 27% to $66.6 million.
• Through April, exports to Korea were up 13% to 66,395 mt, valued at $210 million (up 1%).
• Korea recently opened another duty-free quota for imported pork cuts, which primarily benefits Canadian, Mexican and Brazilian pork (the U.S., EU and Chile already have duty-free access).
• Eligibility was also recently restored for pork imports from one German slaughter plant located in a region free of African swine fever (ASF).

Waning Outlook for China 

Borror still expects U.S. pork exports to grow 8% overall in 2023, even with a waning outlook for export potential to China.

“We are super cautious on China,” says Borror. “Unfortunately, I'm getting more and more pessimistic by the day. We have staff in China, they are working hard to continue to grow the demand in that market, but that said, they're also realistic.”

Borror says one of the major reasons is how low hog prices are in China. She says currently, live hog prices in China are 14 yuan per kilogramme, which equates to less than 90 cents per pound live. In order to have an economic incentive to increase imports, those prices need to be around 20 yuan per kilo.

“Where China has been really important for U.S. pork, all along, is the variety of meats. So, the feet, the stomachs, the heads, the neck bones - that demand had stayed strong,” she adds. “April numbers were really good for China on variety meats.”

She says lately, USMEF has seen that demand taper a bit, which is a new development, and that’s another reason she’s worried about the demand recovery in China.

“They have an excess supply on the production side, but they also have a lot of meat in freezers right now, for pork and grass-fed beef. And it's a concern as the COVID comeback hasn't materialized like even I thought it would.

Ongoing West Coast Port Labor Dispute 

One not of caution when it comes to the forecasts for the remainder of 2023, is the ongoing West Coast port labor dispute. While negotiations are still ongoing, it hit rough waters this month. The largest terminal at the Port of Long Beach closed for the day with workers demanding better pay. Last week, a similar situation unfolded in Oakland. 

Halstrom added that for both beef and pork exports, it is imperative that West Coast port terminal operators reach a contract agreement with longshoremen.

“While there has been no formal strike or lockout, sporadic work stoppages on the West Coast are a major concern for exporters and their international customers,” Halstrom said. “This is especially true for companies shipping chilled beef or pork to Asia. For that business, reliability and timeliness are paramount.”

Read more details from USMEF's detailed report on April pork and beef exports. 

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