While 2008 remains the zenith for U.S. pork exports, in many ways 2010 has matched it when it comes to the value international exports bring to U.S. producers.

Final statistics for 2010 show that U.S. pork exports (muscle cuts plus variety meat) exceeded 1.9 million metric tons (more than 4.2 billion pounds) valued at almost $4.8 billion. These totals represent a 3% increase in volume and a 10% jump in value over 2009. Although exports fell 6.6% short of the volume record set in 2008, their value is just 2% shy of the 2008 record.

The importance of the 2010 results can be viewed in several ways. First of all, 2010 was a challenging year in several key areas. Access was limited for parts of the year in two key markets, China and Russia, with issues related to H1N1. While both markets showed positive signs in the last quarter, China’s imports of U.S. pork were still down 31.6% in value vs. 2008 levels, and Russia’s totals were 55% lower.

Another factor that put a damper on potential export growth last year was the North American Free Trade Agreement- (NAFTA) related 5% import tariff Mexico imposed on U.S. pork hams and shoulders in August. While our contacts with importers in Mexico tell us that the tariff did cause the United States to lose some business to other nations, primarily Canada, that barrier did not prevent U.S. pork from setting a new export record to Mexico. Totals of 545,732 metric tons (1.2 billion pounds) and $986.7 million were increases of 8% in volume and 29% in value over 2009, and the value topped 2008 levels by 42.7%.

In 2010, the U.S. pork industry exported 23.7% of its total production, just shy of 2008’s total of 24.4%, but the incremental value of exports per head was $43.72, up from $38.44 last year and $42.32 in 2008.

The year also saw the United States developing more diverse markets for pork exports. Central and South America, for example, increased their purchases of U.S. pork by 32% in volume and 41% in value over 2009 levels to 59,405 metric tons (131 million pounds) valued at $141.3 million.

Similarly, the ASEAN region (Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam) saw a 12% jump in volume of U.S. pork imports to 66,657 metric tons (147 million pounds) valued at $134.6 million – a 26% hike. And Oceania, driven primarily by Australia, boosted its U.S. pork imports by 7% in volume and 27% in value to 59,491 metric tons (131.2 million pounds) valued at $167.4 million.

One of the key lessons of 2010 – learned over and over again in my 20 years as CEO of U.S. Meat Export Federation (USMEF) – is that the global meat market is very fluid. South Korea, for example, was a sluggish market for much of the year as low domestic pork prices made it challenging for imported product to gain momentum.

However, in the past few months, issues with foot-and-mouth disease (FMD) have caused Koreans to liquidate about one-third of their domestic swine herd, leading to dramatic price inflation and product shortages. The government of South Korea has taken the appropriate steps of lowering duties on imported pork to help meet demand and educating consumers so they understand that FMD is an animal health issue that does not affect humans. This has helped support continued consumption, benefitting the domestic pork industry and driving increased demand for imports.

As a result, while the end-of-year statistics show that U.S. pork exports to Korea are down 16% in volume and 12% in value for the year to 86,991 metric tons (191.8 million pounds) valued at $189.9 million, the trend in recent weeks is much more positive for U.S. pork, the leading imported pork in Korea. In December, for example, imports jumped 52.5% in volume and 77% in value over year-ago levels, and look to continue that trend in the future.

Looking ahead
The challenge facing the U.S. pork industry and beef industries is to maximize opportunities in the international marketplace while domestic consumption remains flat or even declines.

Again, while the numbers for 2010 are very positive, they do not mean that international growth opportunities are exhausted. While the United States is the No. 1 exporter of pork in the world, there are niches that worthy international competitors control. Denmark, Canada, Chile, Mexico and other pork exporters are investing heavily in global markets to protect their market share and steal sales from the United States.

Japan is a great example of the competitive world pork marketplace. The United States is the No. 1 exporter of pork to Japan, more than double No. 2 Canada, but a total of 25 nations exported pork to Japan in 2010. When you look at categories like frozen pork for further processing, the United States is virtually neck-and-neck with Denmark and Canada.

USMEF’s international team is working with U.S. pork processors and exporters to identify specific avenues that offer new growth potential. Our success in capitalizing on those niches – and in responding effectively to the access challenges in China and Russia – opportunities such as unmet needs in South Korea will determine how much U.S. pork exports can continue to expand in the years to come.

Philip Seng
President & CEO
U.S. Meat Export Federation