U.S. pork exports were 440 million pounds in March, almost 9 percent below a year ago. Lower exports were largely due to generally lower exports to Asia, including 19 percent year-over-year lower shipments to Japan. March was the 10th consecutive month in which Japan was supplanted by Mexico as the largest foreign destination for U.S. pork. Likely explanations include Japan’s accumulation of stocks last year as a precaution against PEDv-reduced international pork supplies. Pork stock levels in Japan (figure below), still relatively large, could be a reason for lower Japanese pork imports. Japan Ministry of Finance data indicate that 2015 total pork imports from all sources, through March, are more than 10 percent lower than a year ago.
It is possible that Japanese pork imports will accelerate after more historic levels of pork stocks are achieved. But the relatively high value of the U.S. dollar will likely continue to hamper U.S. pork exports to Asia, where American pork competes with products denominated in lower valued currencies, particularly pork from Canada and Europe.
It is notable that so far in 2015, U.S. exports to Mexico have continued to climb despite the depreciated value of the Mexican peso against the U.S. dollar (see figures below).
A possible explanation for robust flows of U.S. pork to Mexico is the relatively low year-over-year prices of U.S. hams thus far in 2015. In turn, the recent declines in U.S. ham prices may be linked to the reduced purchasing power of the Mexican peso. A significant component of U.S. pork shipments to Mexico are fresh bone-in hams. The low value of the peso versus the dollar may have tempered Mexican demand for these hams until ham prices declined enough to offset exchange-rate effects and keep U.S. pork products flowing to Mexico.