Who doesn’t like to hear or talk about good news? There just never seems to be enough of it.

U.S. pork exports are an example of a good-news scenario that’s worth repeating and digging into a bit further. That’s what University of Missouri Agricultural Economists Glenn Grimes and RonPlain, along with Steve Meyer, president of Paragon Economics, did recently.

The trio laid out the past 20 years of U.S. pork exports to get a more accurate perspective of the trends, value and benefits of this marketing venue.

By now everyone should know that 20 years ago the United States was a net pork importer—to the tune of 1.036 billion pounds. In 1986, only 86 million pounds of U.S. pork was shipped elsewhere. Yet, even that modest amount added $1.97 to each U.S. market hog. 

By 1995, the United States moved into the net-pork-exporter column.

Fast forward to 2005; U.S. pork sold 2.66 billion pounds of product overseas. Sure, we still import some pork, but it’s less than half the amount brought in during 1986.

In 2005, U.S. exports increased the value of each market hog by $25.44. Actual pork muscle cuts added $22.01 to the total, but equally impressive is the fact that byproducts added another $3.43 per market hog.

Stop and think about that a moment. Pork byproduct sales alone now add nearly twice as much value to each market hog as all U.S. pork exports did in 1986. 

Another fact you should know well, is that last year was the 14th consecutive record year for U.S. pork exports. This year, is on track for a 15th record. First-quarter sales were up 22 percent in volume and 9 percent in value from 2005 levels. While many market watchers expect export growth to slow somewhat in the years ahead, U.S. pork should continue to move well in foreign markets.

It shouldn’t come as a surprise to get a sprinkling of cautious (not bad) news in the mix. The 22 percent gain in export sales for first-quarter 2006, means that 15 percent of the pork produced from all U.S. market hogs is now exported. That has doubled in the past five years. However, the caution comes in imagining what would happen if export markets suddenly closed to U.S. pork.

That’s why exports can be a good-news/bad-news business venture. 

While Japan remains U.S. pork’s No. 1 customer (39.3 percent of exports), it’s not contributing to this year’s gains. Shipments to Japan have been falling short of 2005 levels. While it’s unclear why Japan is buying less, there’s good news in the fact that sales are diversifying. So far, shipments to Mexico mark the biggest growth in volume for U.S. pork. Taiwan, South Korea, China-Hong Kong also are all recording double-digit growth.

“We’ve seen a change in the world market (for pork). It was just Japan, now it’s more diverse,” notes Jon Caspers, U.S. Meat Export Federation chairman. “The risk is high if you’re dependent on one market.”

There are many reasons for the export gains.

Philip Seng, USMEF president, points to producers’ commitment as a significant reason. Not only have producers improved product quality and consistency— packers also get a share of the credit— but they’ve consistently funded educational and promotional efforts to expand markets. 

The economists support this by reviewing pork checkoff spending. In 1987 (the first year of the mandatory pork checkoff), producers spent $125,834. By 1997, annual funding was pushing $5 million. It then fluctuated between $5.7 million and $4.3 million annually, with 2005 coming in at $4.75 million.

Positive returns aren’t guaranteed, but big payoffs came in 2004 and 2005 at $1.608 billion and $1.654 billion respectively.

Total it up, and for the past 20 years pork checkoff spending has been $54.66 million, with returns equaling $6.33 billion.

Another factor adding to increased sales involves gains in more countries’ per capita incomes. “More of the world is shifting away from cereal diets and toward protein diets,” notes Seng.

China is one such example. “China has always been a tempting market. The Chinese consumes 50 percent of all pork produced.” However, he doesn’t see China as the next Japan. “Due to social issues, it will be 15 years or more before that happens,” says Seng.

Vietnam offers another opportunity. “This market is just getting started. It is now a market for offals and variety meats. But it is evolving into more cosmopolitan cuisine, so a bigger chunk of the hog will eventually go go there,” notes Seng. Of course, Vietnam’s acceptance into the World Trade Organization would help— something the National Pork Producers Council and U.S. governmental trade agencies are supporting.

“I think by next year, Vietnam will be in the WTO,” says Nick Giordano, NPPC’s trade counsel.

“Trade with Vietnam could add another 38 cents to each market hog,” says Joy Phillipi, NPPC president.

South Korea is yet another important future market. “A free-trade agreement with Korea would be the biggest since the North American Free-trade Agreement,” says Giordano.

Certainly attention to trade agreements, and the deepening embrace of a full global economy has advanced export opportunities for U.S. pork.

“This industry is the posture child for trade agreements. Every time we get an agreement, pork exports increase,” says Giordano. He’s seen aggressive trade action in recent years, and expects that to continue. “Trade is just too important today.”

“Momentum is a difficult ally. It’s hard to get, and once you loose it, it’s hard to get back,” says Steve Murphy, NPB’s chief executive officer. Now that 15 percent of the pork from all U.S. market hogs is exported, that message is worth repeating.