A 10 percent duty on most U.S. pork entering Mexico took effect June 5, contributing to a slowdown in June volume (59,967 mt, down 7 percent last June's record-large total). Export value fell 16 percent to $105.1 million. First half export volume to Mexico was still 4 percent ahead of last year’s record pace at 413,231 mt, but value slipped 1 percent below a year ago to $726.1 million.
"USMEF is working closely with Mexico's major processors and other key customers to reemphasize the advantages of fresh U.S. pork, as we work to assist U.S. suppliers in solidifying as much business as possible in this critical market," Halstrom said. "USMEF feels strongly that exports to Mexico could set another new volume record in 2018, though export value will likely be lower due to the retaliatory duties. We remain hopeful that duty-free access to Mexico will be restored soon, as competitors are now targeting a market that U.S. pork has dominated for many years, and the duties are contributing to lower prices for U.S. producers and adding costs for customers in Mexico."
Pork exports to the China/Hong Kong region were already projected to be lower in 2018 due to China's higher hog production, but the additional 25 percent tariff imposed on April 2 (imported pork still enters Hong Kong duty-free) intensified this trend. First-half exports to China/Hong Kong were 21 percent below last year's pace in volume (216,008 mt) and down 9 percent in value to $507.2 million. June exports were hit especially hard, declining 37 percent from a year ago in volume (28,569 mt) and 19 percent in value ($70.7 million).
January-June highlights for U.S. pork exports include:
- June exports to leading value market Japan were 5 percent higher than a year ago in volume (31,773) and increased 6 percent in value ($131.9 million). In the first half, export volume was down 1 percent to 199,067 mt but value still edged 1 percent higher to $821.4 million. This included a 2 percent decrease in chilled pork to 104,365 mt, valued at $504.2 million (up slightly year-over-year).
- Exports to South Korea posted an outstanding first half, climbing 42 percent in volume (134,190 mt) and 49 percent in value ($386.5 million). Korea’s per capita pork consumption continues to expand rapidly, and U.S. pork is capturing a larger share of Korea’s imports while Korea’s domestic production is modestly increasing.
- Fueled by strong growth in Colombia and Peru, first-half exports to South America jumped 29 percent from a year ago in volume (62,314 mt) and 26 percent in value ($153.5 million). Plant and product registration requirements for exporting pork to Argentina were finalized in late June, so the Argentine market could add further momentum for U.S. pork in the second half of the year.
- Following a record performance in 2017, pork exports to Central America surged 20 percent higher in both volume (40,210 mt) and value ($95.5 million). While Honduras and Guatemala are this region's mainstay markets, exports to all seven Central American nations achieved double-digit growth in the first half of 2018.
- Exports to the Dominican Republic, which were also record-large in 2017, increased 16 percent in both volume (22,267 mt) and value ($49.5 million) in the first half of the year. For the Caribbean region, exports were up 11 percent in both volume (29,960 mt) and value ($71 million).
- Led by the Philippines and Vietnam, first-half exports to the ASEAN region increased 16 percent in volume (26,952 mt) and 21 percent in value ($71.2 million). The Philippines is an especially important destination for pork variety meat exports when shipments to China are declining, and first-half variety meat volume to the Philippines climbed 64 percent from a year ago to 8,680 mt, while value jumped 70 percent to ($15.3 million).
- With the tariff situation in Mexico, Oceania is an increasingly important destination for U.S. hams and other cuts destined for further processing. First-half exports to Australia were 7 percent higher than a year ago in volume (39,031 mt) and increased 9 percent in value ($113.7 million). Exports to New Zealand increased 15 percent in volume (3,903 mt) and 17 percent in value ($12.5 million).