“Since the start of this year, we have been focused on bringing our new strategic plan to life,” said National Pork Board CEO Chris Hodges.

“That means delivering programs that build consumer trust and drive sustainable production in order to grow consumer demand. In meetings with many pork producers, we have identified an untapped marketing opportunity with China.”

In recent months, China has faced a massive reduction in sow numbers, while US pork production is at record levels.

“In short, we are producing more hogs today than ever before and it’s largely due to the fading impact of PEDV, which stifled growth in 2013 and 2014,” Hodges said.

“Increasing international trade is just one example of how the Pork Checkoff helps define and capitalize on current market opportunities,” he added.

“We also are committed to investing $9 million to $10 million over the next two years in supplemental domestic and international marketing efforts.”

The investment will help build long-term export relationships and expand US pork’s global market share.

“Our vision is to elevate US pork as the global protein of choice, and our mission is to serve as a catalyst to unite pork producers,” Hodges said. “We hope producers see the benefit in understanding this unique marketing opportunity as we attempt to grow US exports.”

So, Why China?

Chinas-per-capita--2015-1As the world’s No. 1 consumer of pork, China imports more pork than any other country. Looking back over the past four years, the United States has shipped, on average, four pounds of every market-weight hog to China.

US shipments to China have slowed since early 2014 for a number of reasons. First, the large liquidation of sows in China has put extra pork on its domestic market, pushing Chinese pork prices lower. Second, the US dollar has strengthened relative to competitors’ currencies, making US product comparatively more expensive. Finally, China is restricting product from pigs produced with ractopamine and has “delisted” many US pork plants due to positive ractopamine residue tests.

The delisted plants cannot ship pork to China until they are approved. The National Pork Producers Council, other meat organizations and the US government are working with China to get them relisted on China’s list of approved exporting facilities.

“With the recent restrictions on ractopamine, US pork exports to China have slowed dramatically,” Hodges said.

“Ractopamine is a safe, commonly used tool in many parts of the world, and nearly all of the countries that import US pork accept its use. However, it is not recognized by China despite safety approval by both the US Food and Drug Administration and, on a worldwide basis, Codex, an international body that sets standards.”

Few US packers are able to guarantee delivery of ractopamine-free pork and, as a result, the European Union (EU), Canada and Brazil are benefiting from increased exports to China, according to Steve Meyer, vice president of pork analysis for Express Markets, Inc. Analytics and a Pork Checkoff consultant.

“To be clear, ractopamine is an effective product that is safe, but a major US pork customer – that could become a huge customer – has said ‘no thanks’ to product that contains ractopamine,” Meyer said.

Hodges said that this presents an opportunity for the US pork industry to increase exports by making pork producers and packers aware – and securing the commitment – of some in our industry to adjust production practices.

“Some are concerned that removing ractopamine would not help gain market access in China, but this obstacle has become critical,” Hodges said. “It is the consensus of the Pork Board that producers who are interested in and able to adjust their production should consider working directly with their packer to take advantage of this opportunity.”

Iowa State University economist Dermot Hayes, an expert on China’s economy, views China’s demand as the single largest market opportunity for US pork producers.

“If China increased imports of pork from the US by just one per cent of its consumption, it would equal a staggering five per cent of total US production,” Hayes said.

The EU’s market share is around 65 per cent of China’s pork imports, which is directly at the expense of the US

“Action by US producers and aggressive steps by the USDA’s Food Safety and Inspection Service to work with US exporters to expand the list of approved providers of US pork could reverse this trend,” Hodges said.

Further Reading

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