The National Pork Board has approved the use of Pork Checkoff funds for research to help fight Mexico’s claims that the United States is selling hams below fair market value in Mexico. Mexico seeks to impose an anti-dumping levy similar to a tariff, on U.S. pork imports.

Although hams account for just 20 percent of the revenue earned on a hog, Mexican officials who filed the anti-dumping claim assert that the profitability of hog producers is completely attributable to ham prices, says Steve Meyer, Paragon Economics. The Mexican officials have ignored the impact on hog producers’ profitability on the 80 percent of revenue earned on pork products other than ham, including loins and bacon says Meyer.

Both the National Pork Producers Council and the National Pork Board are working through the American Pork Export Trading Company to resolve the Mexican trade issue.

The U.S. shipped 219,000 metric tons of pork to Mexico in 2003. Through June of 2004, U.S. exports to Mexico increased 85 percent in volume from the same period the previous year.

Hams constitute a large portion of the increase in exports to Mexico, Meyer says. Weekly data for July 2004 show that prices of 17- to 20-pound hams were about $24/cwt higher than in 2003. Because ham accounts for roughly 24 percent of the carcass, this price increase has raised pork cutout values by $5.76/ cwt, adding nearly $10.95 to the value of a market-weight barrow or gilt.

Since the North American Free Trade Agreement took effect in January 1994, Mexican hog producers have sought to impede imports through a series of antidumping investigations on live hogs and pork, says Meyer. Although the U.S. pork industry has ultimately succeeded in defending each of these investigations, the cases have caused U.S. producers to lose tens of millions of dollars in sales and profits.

Most recently, the U.S. pork industry fought for 17 months against an antidumping investigation of U.S. pork exports. The Mexican government agency that administers Mexico’s trade laws terminated that investigation on May 31, based on a finding  that there was insufficient evidence to warrant imposing duties.

National Pork Board