A new world order is emerging and pork production isn’t immune to changes in global economics and leadership.

Established pork-producing countries, like Denmark and the Netherlands face challenges on environmental and animal welfare fronts. At the same time, new pork powers will be emerging in Brazil and other South American countries, largely due to the availability of feed grains and labor there.

Of course, sidetracks can surface and are never predictable.

“Clearly the most important thing is herd-health status,” says Ron Plain, University of Missouri agricultural economist. “Five years ago, Taiwan was among the world’s top pork exporting countries. Today Taiwan imports pork, all due to a foot-and-mouth disease outbreak.”

The North American pork industry has an excellent swine health record, which is one reason the United States and Canada are front-runners in the pork export race.

After health status, feed grain availability is the primary criteria for success in the world pork picture. This puts the United States and Canada in the driver’s seat, with Brazil and Argentina in hot pursuit.

Brazil and Argentina have been among the leaders in soybean production, but now they are starting to diversify into other feed grains, putting them in a much stronger pork production position.

Then there’s the environmental issue. A nation must have adequate land to absorb nutrients from the manure that the hogs create, says Nick Giordano, trade counsel for the National Pork Producers Council. With more people worldwide focusing on environmental issues, this is a significant advantage for countries with abundant land, like the United States and Canada. Of course, the U.S. pork industry in particular, has had to deal with lots of environmental regulations, which could increase U.S. pork’s appeal to foreign buyers or could limit future production.
All things considered, the United States fits the bill in every category necessary to be a major player in the global pork market. But it is not alone.

Canada has similar production costs, food safety standards and pork quality as the United States. The only distinguishing characteristic between the two countries is the United State’s position as a world political leader. This can lead to resentment and hard feelings from other nations and may give Canada a slight edge in the race to be the world’s No. 1 pork exporter, according to Plain.

Next is the European Union. However, some of the EU’s major exporting countries survive largely due to government programs that subsidize export efforts. The environmental card becomes even more important in Europe, as countries like Germany and Denmark do not have enough land to handle hog manure.

South America has enormous potential, but has real concerns about maintaining high herd-health status and establishing markets for its pork. Geography is South America’s enemy, because shipping costs increase product costs and decrease product quality and freshness.

The dark-horse is Mexico. There is some interest in the United States and Mexico working together to build a substantial pork industry in northwest Mexico. The plan would include shipping U.S. grain to Mexico, raising the hogs and shipping the pork back to the United States. The logic being that northwest Mexico is closer to California and for that matter Japan than the Corn Belt. It also doesn’t hurt that labor is cheaper and environmental regulations are more lax south of the U.S. border.

“The wild card is China,” says Plain. “China produces and consumes almost half of the pork in the world.”

Plain points out, the Chinese government appears to like to keep pork production and consumption in balance, so the country is not importing or exporting much pork. The question is whether consumption will outrun production, which seems more likely than the reverse. If that’s the case, China will become an importer of pork – a fact on which many countries are banking.

South Korea had been expanding its pork industry until foot-and-mouth disease broke last year, which crashed their exports down to zero.

Australia has the potential to be a global pork player, due to its high herd-health status, low population and abundant land. The Achilles heel is a lack of convenient, affordable feed grains.

It is a difficult and expensive place to ship feed grains to Australia, and it has high restrictions on imports.

There was speculation that Poland, the Ukraine and other former Soviet block states in Eastern Europe might develop into major pork producing areas, but that has not panned out. These countries’ economies have held back production, meanwhile pork consumption has risen to gobble up any production increases that have occurred.

Japan continues to be the world’s largest pork importer and all signs point to more of the same in the future. Plain says the Japanese are reducing livestock as the population grows and land remains fixed.

Knowing who the players will be is one thing, but knowing why they will be major players is more important. While the ability to produce large amounts of pork economically is still a requirement to become a top pork exporter, it is no longer the only issue of concern.

“The overriding issue today is food safety,” says Plain. “With ‘mad cow’ disease generating so much press, that keeps food safety in the front of consumers’ minds.”

Issues like Salmonella and E. coli must be addressed to give foreign consumers confidence in a country’s pork exports.

Environmental and animal welfare issues also are potential hurdles. Much of the EU’s pork production has been hampered by costly animal welfare regulations.

“Most third-world countries are insulted when you talk about animal welfare, because they are more focused on human welfare,” says Giordano. “The animal welfare discussion is going on only in Europe, and to a lesser degree, in the United States, Canada and Japan. Most other countries are worried about feeding their people.”

Plain sees environmental issues as more of a sticking point with consumers in the future than animal welfare issues.

While, both issues will be worth watching, for now much of the world will still look to buy the most affordable pork.

Of course, pork quality and a secure and consistent supply are important traits for a pork exporter. The Japanese market is very particular about pork’s color, pH and water-holding capacity. One shipment of pale, soft and exudative pork can ruin confidence in U.S. pork.

The most important aspect for global pork trade is the strength of the global economy. It is expected to grow modestly again in 2001, which is good for the meat industry.

“There’s nothing that does more for meat demand than putting money in the pockets of poor people,” says Plain. “One of the first things people do when they get more money is add more meat to their diets.”

Giordano points out that U.S. pork has increased exports greatly over the past several years even with a strong dollar and depressed economies in some of pork’s primary markets. Now many of those markets are bouncing back, while the dollar appears to be weakening, which all point to stronger markets for U.S. pork.

For U.S. pork exports to continue to grow, Giordano says the U.S. government needs to continue fighting for more transparent markets and improved access. Removing trade barriers would almost surely spell the end of at least one of the United States’ top competitors.

“Aside from environmental restrictions and higher production costs, Denmark is protected by high tariffs and subsidies on pork,” says Giordano. “As trade negotiations continue and trade barriers come down Denmark will not be able to compete with the United States and Canada.”

As more land is needed for housing and industry around the world, global pork trade will continue on the upswing. New powers will emerge to compete with the current leaders, the United States and Canada, but don’t expect either country to give up any advantages.