U.S. Pork exports have changed dramatically in the past 22 years. Those exports have grown from 86 million pounds carcass weight equivalent in 1986 to 3.1 billion pounds in 2007. Looking at it another way, the United States has gone from a negative 1.036 billion pounds net exporter in 1986 to a positive 2 trillion pounds in 2007.
"The growth of exports is good news for pork producers," says Glenn Grimes, an economist with the University of Missouri. "It has had a great impact on their income."
Grimes is one of three economists who conducted a pork checkoff-sponsored analysis. Grimes, Ron Plain, professor at the University of Missouri, and Steve Meyer, president of Paragon Economics, are economic consultants for the National Pork Board.
"We believe the total income of all U.S. pork producers has been improved by $7.4 billion over the last 22 years by the increase in exports," Grimes says.
The value of pork and pork byproduct exports has grown from $1.97 per hog slaughtered in 1986 to $28.91 per head harvested in 2007. These changes in trade have permitted the U.S. pork industry to grow at an additional rate of about 0.8 percent per year on average during the last 22 years.
"In other words, the U.S. pork industry was about 18 million head larger in 2007 than it would have been had pork imports and exports remained at 1986 levels," Grimes adds. "Not only has the increase in the quantity of pork traded allowed the industry to grow without lowering prices, but it has also added to producer' incomes in the years when net exports grew.
"Based on our efforts to calculate the effect of imports and exports on the price of hogs between 1986 to 2007, we believe these estimates are conservative because they show that prices increased only in the year when net exports grew," Grimes continues. "We assumed producers reacted to higher prices by increasing the U.S. herd enough to offset any price benefits from net export growth in the following years."
Japan is the largest U.S. pork customer, purchasing nearly 34 percent of U.S. exports in 2007. Mexico is second and Canada is third in tonnage purchased from the United States.
Pork producers have spent nearly $64 million in the last 22 years to promote exports through Pork Checkoff funds. "Pork producers can take credit for much of this export growth. They have improved the quality of pork which has made it more competitive and funded promotion efforts," said Grimes.
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Source: National Pork Board