Despite some global economic factors pointing to a slow down in U.S. pork exports, exports remain strong. Last year marked the tenth consecutive year of growth.

However, U.S. pork and pork variety meat exports were boosted considerably by Europe's foot-and-mouth disease outbreak and bovine spongiform encephalopathy in Japan.

U.S. pork exports rose 21 percent to 551,000 metric tons for first 10 months of 2001, compared to the same period in 2000. By comparison, U.S. pork exports in 2000 rose 13 percent over 1999 levels. The 2000 sales equated to only a 14 percent increase in value, due primarily to a different mix of cuts sold.

U.S. pork export sales have rocketed during the past decade, which has put money in your pocket. The question is can U.S. pork exports maintain the rapid growth?

Most global economic factors that affect U.S. pork exports were not favorable heading into last year. The U.S. dollar remained strong and economies around the world were weakening, which would tend to signal more moderate export growth.

"Last year's strong export growth flew in the face of many of the economic signals," says John Cravens, director of foreign market development for the National Pork Board.

Europe's FMD outbreak shut down exports of affected countries for several months, leaving their buyers scrambling to find new sources of pork. Neighboring countries with no FMD were temporarily taken out of the market as well. The BSE outbreak in Japan also has been important. It's led to a 60 percent decrease in Japanese beef consumption, which triggered a 10 percent increase in pork consumption there.

Steve Meyer, National Pork Board director of economics, says the two outbreaks had positive effects for U.S. pork exports, but it would be difficult to gauge just how great. Also, he points out that the effects of Japan's BSE outbreak have probably not yet fully shown up in the export statistics.

While both disease issues were a chance happening, the United States' ability to take advantage of the situations was not a chance happening. The U.S. pork industry was able to capitalize on the market opportunities because it has a high herd-health and food-safety status, making U.S. pork an attractive alternative when disease and food safety concerns arise elsewhere. That's why the United States and Canada have been and are projected to remain at the top of the global pork export list.

There's a different mindset in the industry as well. "U.S. pork exports were able to capitalize on the outbreaks because the United States has excellent herd-health status, and U.S. companies and producers are more export minded than they were 10 years ago," says Meyer.

Disease outbreaks show that you can't predict the future. Consequently, U.S. producers should be ready for future opportunities and be aware of vulnerabilities.

"Another surprise outbreak of FMD will occur, just keep your fingers crossed it's not in the United States," says Ron Plain, University of Missouri agricultural economist. "In 1997 Taiwan was the second largest pork exporter in the world. Then FMD hit and the country hasn't exported pork since."

The market opportunities surfaced at a good time for U.S. pork exports. In addition to the already unfavorable market forces, the events and aftermath of Sept. 11 have tempered travel, which could reduce the amount of pork exported to vacation spots like the Carribbean. But so far, the impact on U.S. pork exports has been minimal.

"FMD and BSE outbreaks overcame the market forces that indicated it was going to be a drastically reduced year for U.S. pork exports," says Cravens. "The disease outbreaks also overshadowed any negative impact that Sept. 11 may have had on pork exports."

Regardless of current market situations, the future of U.S. pork exports looks optimistic. The U.S. Meat Export Federation projects U.S. pork exports to continue growing each year through 2008.

"The opportunity is still there for pork exports to grow, the question is what percentage of the market can U.S. pork still capture?" says Cravens.

The International Food Policy Institute projects that world pork consumption will climb from 74 million metric tons in 1993 to a projected 122 million metric tons by 2020. Pork is still the meat of choice around the world, accounting for 41 percent of global meat consumption.

Japan and Mexico are expected to remain the top two U.S. pork export markets. Mexico's economy is slowing along with the U.S. economy, which could slow U.S. pork sales in the short term, but in 2003 all tariffs and quotas will be eliminated between the United States and Mexico under the North American Free Trade Agreement. That should give U.S. sales a good opportunity to grow, says Cravens.

"Our exports can continue to grow at the pace of the last 10 years," says Meyer. "The United States has recently gained access to some very large markets, like China, which potentially could grow our exports significantly."

In the near term, U.S. pork exports are expected to grow, but more moderately than last year. NPBhas established an annual goal of 15 percent growth and some forecasts have export growth as high as 18 percent for 2002 vs. 2001. Meyer points out that 15 percent of the 1.4 billion pounds exported last year is more significant than a 15 percent gain in the early 1990s when export tonnage was lower.

Plain projects more moderate growth for the year. He points to positive factors such as the United States having a slightly higher pork supply than last year, being free of foot-and-mouth disease and having a high-quality product. However, those factors will be held in check by some negative factors, which include a global recession and a strong U.S. dollar, which makes all American products look expensive.

"The dollar's so strong that it really hurts exports," says Meyer. "Still, we've been able to have some very good years, in spite of that."

Exports have gone from an afterthought to a major bonus. Last year, the increase in net exports for the first 10 months vs. the same period in 2000 added $5.59 in value to every hog slaughtered in the United States, says Meyer.

Even if exports fall short of NPB's goal next year, more moderate export growth wouldn't spell gloom and doom for domestic hog prices.

"Prices are the result of a balancing act between supply and demand, exports are just one part of that," says Plain. He suggests that if U.S. producers' set their export sights too high, and production follows, then prices become vulnerable. "Since production growth has been moderate, if we have only moderate export increases prices shouldn't drop much."

It's been a decade of enormous growth for U.S. pork exports, and that has helped put money in your pockets. Even if the growth rate slows, pork exports should remain a positive force for the U.S. pork market. That is provided the next surprise disease outbreak occurs in a foreign country and not on U.S. soil.

Paying the Price of a Disease Outbreak
When bovine spongiform encephalopathy broke in Japan last September, it hit U.S. beef producers hard in the pocketbook.

Since that time, Japan's beef consumption has dropped 60 percent, says John Cravens, National Pork Board's director of foreign market development.

A poll of Japanese consumers shows 89 percent were "very or somewhat concerned" about the BSE issue; 34 percent say they now eat beef less often or consume less beef; and 25 percent of all respondents say they have stopped eating beef. These consumers are painting all beef with the same brush stroke, regardless of its country of origin.

The alarming loss of consumer confidence has caused the U.S. Meat Export Federation to seek more than $8 million for education programs to promote the safety of U.S. beef to Japanese consumers.

Since final 2001 export numbers were not yet in at the time of this writing, the full effects of the BSE outbreak on U.S. beef exports was not known. However, Japan is the No. 1 export market for U.S. beef, by a wide margin.