There’s no denying the world loves pork – it’s the most popular meat on a global basis. Despite the COVID-19 crisis striking the globe now, people still want to eat and there’s a sense of peace and satisfaction that comes from eating good wholesome food.
“Japan, South Korea and China have all been affected by this horrible disease [COVID-19] but are also ahead of us in the curve in dealing with it,” says Norman Bessac, vice president of international marketing for the National Pork Board. “If there’s a light at the end of the tunnel, pork exports are the light. We can look at those markets that are now moving into the recovery stage and provide our products to keep the flow going and positively create value for the supply chain.”
In the face of uncertainty that the industry has never seen before, Bessac says he may not have the cure, but he has a “little bit of salve to put on the wound.”
What you do matters.
Producing pork for the world and feeding the world is essential work, Bessac says. “We all should be very proud of what we do and the value that it creates for consumers around the world, not just in the U.S., but in all the markets that we provide.”
In times of uncertainty, he says it's gratifying to know what pork producers do serves so many people around the globe.
Exports are increasing the value of pork.
In times of crisis, Bessac believes the industry needs to create as much value for the business as possible and pull that tension in a positive direction that will present itself no matter where you sit in the supply chain.
Exports are doing that, he says. In January, the second highest month on record for pork exports, the export value per head slaughtered was $62.53, up 40% from $44.59 a year ago. To put it into perspective, nearly 2.4 million hogs were exported in January, an increase of 753,000 more hogs than January 2019.
“I haven't been able to verify, but I believe that’s a record,” he adds. “It illustrates the opportunity that's in front of us to keep pushing that value for the chain forward.”
Growth opportunities are on the rise.
China’s pork shortage is a tremendous way to take the increased production in the U.S. and position it for value. China will recover from the toll African swine fever has taken on its domestic pork supply, but the Pork 2040 research shows the country will never recover to 2014 production or consumption levels. Servicing and helping China fill in that gap now is important. National Pork Board and USMEF staff are looking for value-added opportunities as China moves from wholesale markets distributing hot pork toward modern methods of selling retail chilled pork.
“That's a tremendous opportunity for us to work with the right customers and the right channels to develop a more lasting value and a long-term growth strategy,” he says.
Recapturing core markets is another strategy they’re implementing to increase exports. It was a step forward to see the U.S. reclaim its leadership position of the chilled business in Japan with 53% of that market. It will continue to be a focus to grow that business to a new level, he adds. Meanwhile, removal of retaliatory tariffs in Mexico brought the U.S. back on a level playing field.
Additionally, they’re working to create market diversity. Just like stock portfolios, the more diversified the market is, the better able the industry can manage risk and provide sustainable and long-term growth. Bessac says moving markets from emerging markets that buy one product to markets that buy multiple products is extremely important. He’s excited about markets such as Colombia and Chile that have tremendous growth potential.
Lastly, they want to provide better information insights to drive action for the industry. The 2019 China market assessment helped the industry better understand what is driving both consumption, imports and exports and production in China. Not only did the report dig into what the industry will look like in 20 years, but more importantly, what the challenges and opportunities will be in the next 5-10 years, Bessac says. The team wants to extend that research into the ASEAN region, especially Philippines and Vietnam who have both been severely affected by ASF.
“We are in the age of lots of data,” Bessac says. “It's the old model where data leads to information, which develops knowledge, which should lead to action. The data can tell us the what, which is very important. My job is to take that what and say, ‘so what?’ What can we do to drive value for producers and for the industry?”
Although there are some headwinds affecting the industry, it doesn’t take long to see China’s protein gap and the level playing field in Japan and Mexico provide unprecedented opportunity for exports.
But the opportunities don’t stop there. Whether it’s central South America, Colombia, Peru, Chile, Canada, Vietnam, Philippines, Australia or New Zealand – there’s potential to grow.
“We’re on track for record exports at a time where our producers need the value to show itself in the price of hogs. I’m confident we will deliver on that,” he says.
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African Swine Fever + Coronavirus: A Complicated Outlook