Mexico is the third-largest pork importer in the world and traditionally the largest US market for pork exports by volume. However, shipments to Mexico have been stymied by a number of issues, including retaliatory tariffs, a global health crisis, and a weak Mexican economy, said the special report.

With retaliatory tariffs on pork resolved and economic recovery underway, US pork shipments to Mexico recovered in 2021. The USDA expects them to further improve next year.

In the second quarter of 2021, Mexico was the top international destination for US pork. Shipments reached record highs in August and again in September. With Mexican exports elevated and high feed prices keeping production growth moderate, Mexico has looked to the US for product and will likely continue to do so.

This comes at a critical juncture for the US pork industry, said the report, as Chinese demand is expected to remain below the record levels of 2020.

Looking forward, the USDA expects US pork exports to return to the rising trend seen before the pandemic. Last year, Mexican pork consumption came under considerable pressure because of weak economic conditions and exceptionally strong import demand in China, which pulled domestic product into export channels.

Mexican exports are expected to remain elevated, said the report, as opportunities in Japan and South Korea are expected to offset slowing shipments to China during 2021. Segments of the Mexican pork sector will continue to become more export oriented, particularly due to growing exports to Japan due to improved market access.

In 2022, Chinese import demand is expected to firm and rekindle opportunities for Mexican exporters in that all-important market.

As Mexican exports of high-value pork cuts continue to grow, domestic consumption will be augmented by imported product. The report said this is good news for the US pork sector, as it looks to offset lower shipments to China in 2021 and 2022.

Through September 2021, US pork exports to Mexico increased 30% over the same last year. Firm demand has kept hog and pork prices in Mexico above those in the United States, allowing for robust trade with what can sometimes be a price-sensitive market.