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CME: US Pork Imports

by 5m Editor
7 July 2011, at 6:59am

US - Len Steiner and Steve Meyer discuss US pork imports in today's CME report.

“Why do you never mention pork imports?“ That is a question we have heard from readers from time to time — especially when we write about beef imports.

It is true that pork imports contribute to total pork supplies just as beef imports contribute to total beef supplies but there are several reasons we (and, in general, most pork analysts) don’t pay a lot of attention to pork imports.

Pork imports are much smaller than beef imports and account for a relatively low percentage of total US pork supply. As can be seen in the figure, US pork imports peaked in 1985 (when the US was the world’s largest pork importer!) at just under 1.2 billion pounds, carcass weight.

Pork imports have remained in the range of 600 million to 1.2 billion pounds since then with the past 12 years seeing imports between 800 million and 1.2 billion pounds. For comparison, consider that US beef imports peaked in 2004 at 3.7 billion pounds and were 2.345 billion pounds last year.

Imports as a percentage of total pork supply also peaked back in 1985 and have generally trended downward since that time.

2008 imports as a percent of total supply (3.37 per cent) were the lowest since 1981. This measure of imports also peaked in 1985 but notice that the gap between imports as a percentage of total supply and imports in tonnage terms has been growing as US domestic production has continued to increase.

For comparison: US beef imports as a percentage of total US beef supply have ranged from 6.5 per cent to 12.8 per cent over this time period with the peak coming in 2004.

It should be noted that the US pork industry has grown dramatically since the mid-1980s. US pork production in 1985 amounted to 14.8 billion pounds, carcass weight.

Total US pork disappearance (usually called “consumption“ even though we are not exactly sure where the product goes) in 1985 was 15.8 billion pounds. Those numbers for 2010 were 22.5 billion and 19.1 billion pounds, increases of 22 per cent and 21 per cent, respectively.

Imports of hogs from Canada have garnered far more attention over time than have pork imports. These imports peaked in 2007 at just under 10 million head. But note that the vast majority of the pigs imported from Canada, both then and now, weigh less than 110 lbs. (50 kg) and come to the US for feeding on US farms.

Roughly 60 per cent of these are, in fact, newly weaned pigs that come into the US weighing less than 15.4 lbs. (seven kg). Another 20 per cent weight between 15 and 50 pounds. The remainder fall in the range of 50 to 110 lbs. but are primarily at the bottom end of that range.

Imports of Canadian hogs for slaughter in the US (which includes both market hogs and cull breeding animals) also peaked in 2007 but that 3.28 million head represented only three per cent of total US slaughter.

These slaughter animals accounted for less than one per cent of US slaughter in 2010.

Why have imports declined? First and foremost, the US industry has become much more competitive with world suppliers (even in our own market!) since the mid-1980s. Development and adoption of enhanced genetics, better nutrition and efficient production systems utilising all in, all out pig flows and capturing all available economies of size and scale have driven on-farm costs lower.

Ultraefficient packers have added to that advantage. Second, world pork trade has been liberalised over time. Lower tariffs and the removal of export and production subsidies have allowed to most competitive suppliers, the US, Canada and Brazil, to thrive. Third, exchange rates have changed, improving the competitive position of the US and hurting the position of Canadian and European producers

Further Reading

- You can view the full report by clicking here.