Markets

U.S. Pork Exports for 2001 Revised Upwards Again

USDA International Agricultural Trade Report - The USDA Foreign Agricultural Service has revised its U.S. pork export numbers upwards again. The report says exports will be up 18 percent on a year ago which is the largest yearly percent change since 1998. Exports to Japan are up and sales to Canada and Mexico could set new records.

15 August 2001

5 minute read

U.S. Pork Exports Forecast at Record Level; U.S. Hog Imports Soar

U.S. pork exports for 2001 are forecast at a record level, up 18 percent from last year, and the largest yearly percent change since 1998. Sales to Japan (accounting for nearly 50 percent of the total) for the first 5 months are up 37 percent from the previous year.

In addition, sales to Canada and Mexico are also at a record setting pace. Pork imports are forecast down 5 percent from the previous year as Canada shifts its marketing focus away from the United States to Japan, Russia, Mexico, and as U.S. imports from the European Union (EU) are down due to foot-and-mouth disease (FMD).

Hog imports (mostly feeder pigs from Canada) are still growing at a record pace, while U.S. hog exports are stifled by the continued Mexican compensatory duty on hogs.

Pork Exports Supported by Strong Sales to Japan, Canada, and Mexico ...

U.S. pork exports continue to grow and are forecast to reach a record 700,000 tons (carcass weight equivalent) for 2001.

The record setting pace of pork exports to-date is due to increased sales to Japan, Canada, and Mexico. However, pork exports to Japan are expected to slow starting in August as Japan’s gate price is triggered and pork imports will be assessed an additional 24 percent duty.

From August 2001 to March 2002, U.S. pork exports to Japan are expected to moderate as the recent run-up in Japan’s stocks are used to supplement imports. January-May trade data shows that U.S. exports to Japan shifted from a 70/30 chilled/frozen pork ratio a year ago last May to a near 50/50 ratio this May as exporters sought to take market share from the EU. Also, exports to Canada are up about 50 percent from last year as U.S. exporters fill Canada’s market as Canada continues to expand its export market at the expense of its domestic market.

Mexico continues to increase its purchases of U.S. pork – expanding about 30 percent during the first 5 months. The Mexican pork market may become more competitive the last half of the year as Canada may be looking to export pork to other markets due to Japan’s gate price duty.

While U.S. Pork Imports Soften.

U.S. pork imports for 2001 are forecast to fall 5 percent from last year to 415,000 tons. Most of the decline can be attributed to a drop in imports from Canada. About 80 percent of U.S. pork imports come from Canada.

Canada may be shorting its domestic and U.S. market in order to advance its market presence in other countries, namely Japan, Russia, and Mexico. Imports are down 7 percent from Canada during the first 5 months of 2001. Pork imports from the EU are down 35 percent from a year ago due mostly to import restrictions imposed following the outbreak of FMD in Europe.

Although the FMD ban was lifted in late May, pork imports are not expected to fully recover and make up for reduced imports during the months of April and May.

U.S. Importing Hogs at Record Pace as Hog Exports Plunge

Hog imports from Canada are coming into the United States at record levels - up 27 percent from last year. For 2000, total live hog imports were 4.4 million head. For the month of May, according to U.S. trade data, a record monthly total of 438,539 hogs were imported from Canada, making the year-to-date total 2.1 million head.

Nearly 60 percent of the hogs imported are feeder and this percent is increasing. This is attributed to structural changes in the U.S. mid-west pig industry, the weak Canadian dollar, and contractual agreements. Another significant factor that continues to send feeder hogs to the United States is environmental issues in the Provinces which constrain the construction of finishing operations.

Without new facilities, and with increasing Canadian hog production, this trend is expected to continue. (IATR on Canadian Hog Industry - June 2001) Hog exports are still stifled by the Mexican compensatory duty on hogs under 110 kg.

Hog exports to Mexico were off a staggering 97 percent (Jan -May) from a reduced 2000 year sales level to only 1,554 head. Only two years ago, annual hog exports to Mexico were 160,000 head and comprised about 90 percent of the total U.S. hog exports, today it is about 25 percent of the total. On July 6, Mexico announced that it had reviewed the compensatory duties related to the final antidumping resolution on the imports of live hogs for slaughter under 100 kg and determined that the duties will be continued.