For the first quarter of 2019, U.S. pork exports continued to be slowed by trade barriers while beef exports were only slightly below last year’s record pace, according to March data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). U.S. lamb exports trended significantly higher than a year ago.
Pork exports totaled 211,688 mt in March, down 7% from a year ago, valued at $520.7 million (down 15%). First quarter exports were 6% below last year’s pace in volume (600,268 mt) and down 14% in value ($1.47 billion).
Pork export value averaged $48.55 per head slaughtered in March, down 15% from a year ago. For January through March, export value averaged $46.15 per head, down 16% from the first quarter of 2018. March exports accounted for 25.6% of total U.S. pork production and 22.7% for muscle cuts only – down from 27.5% and 23.5%, respectively in March 2018. First quarter exports accounted for 24.4% of total pork production (down from 26.6%) and 21.3% for muscle cuts (down from 23%).
Since mid-2018, most U.S. pork entering Mexico has faced a 20% retaliatory duty imposed in response to U.S. tariffs on steel and aluminum imports. This turn of events ended six consecutive years of record export volumes to Mexico, and early 2019 is showing no signs of relief. First quarter exports to Mexico were down 13% year-over-year in volume (177,420 mt) and sank 29% in value ($261.9 million). The U.S. is still Mexico’s primary supplier of imported pork but Canada, Chile and the European Union have gained market share in 2019 and Mexico’s domestic pork production is trending significantly higher.
U.S. pork also faces retaliatory duties in China, raising the total tariff rate from the normal 12% to 62%. This will make it difficult for U.S. pork to capitalize on any increase in China’s demand for imported pork, which analysts are projecting in the second half of 2019 and beyond, due to the spread of African swine fever. Through March, U.S. exports to the China/Hong Kong region were 20% below last year’s pace in volume (89,689 mt) and down 34% in value ($172.1 million).
Leading value market Japan has not imposed any new tariffs on U.S. pork, but U.S. exports are at a disadvantage compared to pork from the European Union, Canada and Mexico due to their new trade agreements with Japan. As with beef, this gap will widen unless the U.S. and Japan reach a trade agreement. Through the first quarter, U.S. exports to Japan were 9% below last year’s pace in volume (92,503 mt) and 11% lower in value ($374.9 million).
“The current environment for U.S. pork is a good illustration of why it has been such a high priority for the U.S. industry to develop a wider range of international destinations,” Halstrom said. “Though we absolutely must get back on a level playing field in Mexico, China and Japan, larger exports to emerging markets have offset some of the decline.”
First quarter highlights for U.S. pork include:
- Continued strong growth in Colombia and a large increase in shipments to Chile and Peru pushed exports to South America 41% above last year’s record pace in volume (40,998 mt) and 40% higher in value ($99.3 million).
- Exports to Central America and the Dominican Republic also continue to exceed the record pace of 2018. Strong growth in Guatemala, Costa Rica and Panama along with continued growth to top market Honduras pushed exports to Central America 12% higher in volume (20,903 mt) and 7% higher in value ($48.1 million). Export volume to the Dominican Republic increased 15% to 10,969 mt while value was up 13% to $24.2 million.
- Oceania is a key market for hams and other muscle cuts destined for further processing, and first quarter exports increased significantly to both Australia and New Zealand. Export volume to the region was up 31% from a year ago to 30,070 mt while value increased 14% to $78.6 million.
- Exports to Taiwan surged 83% in volume (6,584 mt, the highest first quarter since 2011) and 57% in value ($14.3 million). U.S. pork has been limited in Taiwan by a zero-tolerance policy for beta agonists, but exports have still trended higher over the past two years. In 2019, the U.S. is the only major pork supplier reporting larger exports to Taiwan.
Demand for U.S. lamb still climbing
Fueled by strong variety meat demand in Mexico and strong muscle cut growth in the Caribbean, the Middle East and Central America, U.S. lamb exports posted a solid first quarter. Exports increased 68% in volume to 4,173 mt while value was up 29% to $6.9 million. For muscle cuts only, exports were lower year-over-year in March, but first quarter exports still increased 25% in volume (659 mt) and 19% in value (just over $4 million).
Complete January-March export results for U.S. beef, pork and lamb are available from USMEF’s statistics Web page.
U.S. pork currently faces retaliatory duties in China and Mexico. China’s duty rate on frozen pork muscle cuts and variety meat increased from 12 to 37% in April and from 37 to 62% in July. Mexico’s duty rate on pork muscle cuts increased from zero to 10% in June and jumped to 20% in July. Beginning in June, Mexico also imposed a 15% duty on sausages and a 20% duty on some prepared hams.
U.S. beef faces retaliatory duties in China and Canada. China’s duty rate on beef muscle cuts and variety meats increased from 12 to 37% in July. Canada’s 10% duty, which also took effect in July, applies to HS 160250 cooked/prepared beef products.