Solid Year for U.S. Pork Exports; Second-Half Pressured By Tariffs

Despite significant headwinds, 2018 pork exports reached 2.44 million metric tons – just 0.5% below the 2017 record. ( PORK )

Pork export volume came up just short of the record set in 2017 while value slipped 1 percent year-over-year according to year-end 2018 statistics released by USDA and compiled by the U.S. Meat Export Federation (USMEF). U.S. beef exports in 2018 shattered the previous value record and achieved a new high for volume. U.S. lamb exports rebounded from a down year in 2017, largely due to stronger variety meat demand in Mexico.

Despite significant headwinds, 2018 pork exports reached 2.44 million mt – just 0.5 percent below the 2017 record. Pork export value was $6.39 billion, down 1 percent year-over-year and the third-highest total on record, trailing only 2014 ($6.65 billion) and 2017 ($6.49 billion). For December only, pork exports were down 5 percent from a year ago to 209,780 mt, valued at $527.4 million (down 11 percent).

Pork export value averaged $51.37 per head slaughtered in 2018, down 4 percent year-over-year. Exports accounted for 25.7 percent of total pork production, down about one percentage point from 2017. The ratio was 22.5 percent when including only pork muscle cuts – up from 22.3 percent in 2017.

Through May 2018, pork exports to leading volume market Mexico appeared to be headed for a seventh consecutive record, topping the 2017 pace by 6 percent. But May was the last month in which exports to Mexico would increase year-over-year, due to retaliatory duties imposed in response to U.S. tariffs on steel and aluminum imports. Export volume to Mexico held up relatively well, finishing the year at 777,143 mt – 3 percent below the 2017 record. But export value took a bigger hit, declining 13 percent to $1.31 billion – the lowest since 2015. The decline in value from June through December was 24 percent, totaling $218 million, underscoring the large degree to which U.S. producers and exporters bore the cost of Mexico’s 20 percent retaliatory duty.

“The U.S. pork industry understands the vital importance of the Mexican market, and with strong industry support USMEF has intensified its efforts to retain as much of this business as possible,” Halstrom said. “This includes enhanced outreach in every sector, from large processors, to regional supermarkets, to specialty retailers and restaurant chains. While these efforts have been successful, the decline in export value clearly shows the negative impact these retaliatory duties have imposed on the U.S. pork supply chain.”

Retaliatory duties also impacted pork exports to China/Hong Kong, which fell 29 percent in volume (351,774 mt) and 21 percent in value ($851.7 million) compared to 2017. This included a 30 percent decline in pork variety meat volume to 225,414 (China/Hong Kong is the largest destination for U.S. pork variety meat). The corresponding dramatic decreases in values for feet and picnic hocks, combined with lower ham and picnic values, mean that retaliatory tariffs in China and Mexico resulted in lost value of $11.75 per head (or $860 million) from June through December 2018.

On the positive side, U.S. pork exports to Korea were record-shattering in 2018, soaring 40 percent year-over-year in volume (242,372 mt) and 41 percent in value ($670.3 million). Export value topped the previous record, set in 2011, by 35 percent as U.S. pork capitalized on Koreans’ surging pork consumption. Most U.S. pork now enters Korea duty-free under KORUS, making pork products more affordable and accessible and a perfect fit for Korean’s convenience-driven demand. Korea’s imports of U.S. pork variety meat jumped by 62 percent in volume (15,525 mt) and 68 percent in value ($45.9 million) as items such as bungs and feet made impressive gains.

Other 2018 highlights for U.S. pork include:

  • Exports to leading value market Japan were steady with 2017 in both volume (394,300 mt) and value ($1.62 billion). But similar to beef, U.S. pork’s position as Japan’s leading pork supplier is threatened by implementation of CPTPP and the Japan-EU Economic Partnership Agreement. The United States is now the only major pork supplier that has not gained tariff relief in Japan, with the most immediate impact expected in Japan’s imports of ground seasoned pork and processed pork products.
  • Fueled by remarkable growth in Colombia and solid increases in Chile and Peru, pork exports to South America reached new heights in 2018, increasing 30 percent in volume (135,298 mt) and 23 percent in value ($328.8 million). While most U.S. pork entering South America is for further processing, the U.S. industry is increasingly making inroads into the region’s rapidly growing retail and foodservice sectors.
  • Pork exports to Central America were also record-large, increasing 16 percent in volume to 86,031 mt and 12 percent in value to $201.7 million. Exports increased to mainstay markets Honduras and Guatemala, but much of the region’s growth was achieved in Panama, El Salvador, Costa Rica and Nicaragua.
  • Australia is one of the top destinations for U.S. hams (outside of Mexico and China/Hong Kong), and strong demand for hams pushed pork exports to Australia up 13 percent from a year ago in volume (80,431 mt) and 9 percent in value ($227.3 million). The U.S. also gained significant market share, climbing from 40 to 46 percent of Australia’s pork imports. Exports to New Zealand also trended higher, climbing 10 percent in volume (7,897 mt) and 12 percent in value ($25.6 million).
  • Impressive growth in the Philippines and Vietnam pushed pork exports to the ASEAN region 43 percent higher in volume (68,326 mt) and 31 percent higher in value ($168.5 million). In a down year for U.S. pork variety meat, exports to the ASEAN were a notable bright spot – more than doubling from a year ago in both volume (28,619 mt, up 129 percent) and value ($45.6 million, up 107 percent).
  • Pork exports to the Dominican Republic continued to gain momentum in 2018, easily surpassing previous records for both volume (42,669 mt, up 39 percent) and value ($92.5 million, up 30 percent).

Complete 2018 export results for U.S. beef, pork and lamb are available from USMEF's statistics Web page.

Monthly charts for U.S. pork and beef exports are also available online.


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2018 Beef Exports Record-Large; Up 7% from 2017

Record Pork Exports to South America Driven by Colombia, Peru

 

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