The pork industry of one of the United States’ most recent free trade agreement partners, Panama, was on full display last week for a group of 20 young pork producers from the United States as the Pork Leadership Institute (PLI) visited one of Central America’s fastest-growing markets for U.S. pork exports.
The U.S. Meat Export Federation (USMEF), working in cooperation with the National Pork Board and the National Pork Producers Council, hosted the team from the PLI for a day as part of an ongoing program to help develop future leaders for the U.S. pork industry.
One of the more affluent countries in the Central America region with low unemployment and double-digit gross domestic product (GDP) growth, Panama has seen a dramatic increase in imports of U.S. pork over the past year since the Panama-U.S. Free Trade Agreement took effect. Through the first seven months of 2013, U.S. pork sales to Panama are up 138% in volume and more than 125% in value vs. 2012, reaching 5,540 metric tons (12.2 million pounds) valued at more than $14 million, according to the Global Trade Atlas.
The totals represent both a substantial increase in Panama’s pork imports from all sources (up 24.6% in volume and 44.3% in value), as well as the U.S. industry’s capturing of significant market share from its international competitors.
“Importers are really excited about working with U.S. pork products,” said Gerardo Rodriguez, USMEF director of trade development for Central America and the Dominican Republic. “Before the FTA, there was a 65% to 70% duty on U.S. pork. Those duties were replaced with a quota with increasing amounts every year.”
Rodriguez noted that the initial market for U.S. pork was the Panamanian processing sector. Over the past year, USMEF has made significant inroads with both the retail and foodservice sectors. This week, in fact, USMEF is launching a promotion with Supermercados El Rey, one of Panama’s largest retailers, utilizing five cuts of U.S. pork adapted to the local cuisine.
“One of the most popular cuts right now is pig feet,” said Rodriguez, who said they are marinated and cooked, then eaten chilled. The other items included in the promotion are bacon, ribs, pork chops and chorizo.
The promotion, which is being funded with support from the Pork Checkoff,is part of USMEF’s educational approach to the market to help raise the perception of pork as a commodity product to a valued protein.
“It has been very interesting and refreshing to see work that has been done to bring together information for the people of Panama,” said Oklahoman Cathy Vaughan of Murphy-Brown, LLC, the livestock production subsidiary of Smithfield Foods, Inc. One of the Pork Leadership Institute members, Vaughan was impressed by the retail exhibits she saw, as well as the use of chefs to prepare product samples in local cuisine styles for consumers to try.
“There was no question for consumers that this was pork from the United States,” she said.
Vaughan and the PLI group also enjoyed a visit to a specialty meat retailer, known as a “meat boutique,” which was started by the founding family as a meat importer and eventually expanded into distribution, foodservice and retailing. Pretelt Exclusive Meats has worked closely with USMEF for several years, expanding its menu of U.S. pork cuts to include baby back ribs, tenderloin and St. Louis ribs. Pretelt recently added another store in Panama and its first store in Colombia.
Just two years ago, the United States trailed Canada in the volume of pork exports to Panama, with 33% of the import market share vs. 36.7% for Canada and 24.7% for Denmark. The United States and Denmark were in a virtual tie for the value lead with just over 35% market share while Canada trailed with about 22%.
So far this year, U.S. pork holds a commanding 68.9% market share when measured by volume (21.7% for Denmark and 4.2% for Canada) and a 61.4% of the value of pork imports vs. 28.9% for Denmark and 2.9% for Canada.
“The visit by the PLI team was a good opportunity for these pork industry leaders to see their Checkoff dollars at work,” Rodriguez said. “The entire Central America region is one of the fastest-growing areas for U.S. pork exports (up 32% in volume and 29% in value through the first nine months of 2013), and Panama offers the potential to be one of the brightest stars in the years to come.”
USMEF has been associated with the PLI team for many years, noted John Hinners, USMEF assistant vice president for industry relations.
“This program has helped educate many future leaders of the pork industry,” he said. “It is important for them to get exposure to the international markets that are buying about 25% of the total U.S. pork production.”