For the first half of 2011, U.S. pork exports totaled 1.08 million metric tons, valued at $2.81 billion. The achievement represents year-over-year increases of 14 percent in volume and 19 percent in value, according to the U.S. Meat Export Federation.
If U.S. pork exports remain as robust during the second half of 2011, expect a record-breaking year. Some concern is starting to show however, as lean hog futures turned lower last week. Will the robust pork demand seen in the first half continue throughout the remainder of the year?
“Strong export demand from China has helped drive pork prices higher, but there is concern that may not continue indefinitely and that pork prices are now topping,” says Rich Pottorff, Doane Agricultural Services analyst. “Global and U.S. economic concerns were bearish for the hog market on ideas that weaker economies could depress consumer demand for meat.”
Worries about a global economic slowdown following the U.S. debt downgrade by Standard and Poor’s could also slow the torrid pace of U.S. pork exports. “The reversal in hog futures has for the most part followed the tumult in outside financial and commodity markets even as spot cash prices remain at record highs,” according to the CME Daily Livestock Report. “A global recession would be detrimental to U.S. pork demand, particularly as U.S. pork supplies tend to increase in the fourth quarter.” In 2010, hog prices slumped during the fourth quarter as heavier hogs hit the market.
According to statistics released by USDA and compiled by the USMEF, pork exports in the first half accounted for more than 27 percent of total U.S. production with export value equal to $52.76 per head.
South Korea has taken bold measures in recent months to deal with its dwindling pork supplies and rising prices, and U.S. pork has been well-positioned to capitalize. With duty-free access on certain cuts and aggressive marketing programs firmly in place, U.S. pork exports to Korea reached $301.5 million. This represented a 145 percent increase in volume over the first half of last year.
Pork exports to Japan have increased 13 percent in value to $944.2 million through the first half of this year. Exports to Canada have grown at a similar pace – achieving a 12 percent growth in value to $335 million. The Hong Kong/China region – where access was limited in the early months of 2010 – was up 30 percent in value to $260.5 million.
Source: CME Daily Livestock Report, Doane, USMEF