Pork Exports Explode; USDA Notes Possible Reporting Error
USDA’s note in the Oct. 10 pork export sales summary is raising questions. What’s going on with the pork sales reporting?
Pork exports had an incredible week – a marketing-year high – reporting 292,000 metric tons (MT) of sales for 2019 for the week ended Oct. 10 as compared to 31,300 MT last week. But USDA added a special note this week that information in the export sales report for the week ending Oct. 10, 2019 accurately reflects what was reported to USDA by U.S. exporters. However, this week’s report includes a significant quantity of pork sales for the current marketing year that may have occurred in previous weeks but were not previously reported.
“What does USDA mean by ‘may have occurred?’ They do not know?” questions Pro Farmer’s Jim Wiesemeyer.
USDA's mention of "accurately reflects" is also raising questions.
“Did some pork exporters not report sales on a timely basis? If so, who and when?” Wiesemeyer asks. “If that occurred, did some hog producers who sold not receive an ‘accurate’ price because one or more exporters did not report timely export sales? What is the penalty for not accurately reporting sales? This situation comes at a time when an increasing number of farmers do not trust USDA relative to crop estimates and other issues. This will not soothe them.”
An ag industry analyst told Wiesemeyer, “Meat sales are always understated. Dig up a Census pork export tally Jan-Aug and then look at weekly cumulative data. Not in the same ballpark. This does not mean the weekly report should be ignored, but Census is what counts. Similar discussion on grain, but the grain miscalculations are minuscule compared to meats.”
But another industry analyst cautioned that the weekly report and Census comparisons are two different sets of data, there are always some differences.
Bottom line? U.S. pork industry officials have always supported and say they need transparency, Wiesemeyer says.
“There are some issues within the industry on what they are required to report,” he says. “What some suspect may have happened is that USDA’s Foreign Agricultural Service sent out their note clarifying what is to be reported, and that likely prompted the flurry of sales reported this week.”
USDA responded on Friday afternoon that to ensure that export sales data are complete, USDA continually identifies commodity exporters that may not be registered with the Export Sales Reporting program. Once identified and registered, they are required to report all export sales from the beginning of the current marketing year for the commodity in question. Any previously unreported sales are aggregated with the current week's data.
Mexico leads pork buyers this week
Not only is the major jump in sales turning heads, but Pro Farmer’s Davis Michaelson, says he’s interested in this week’s leader of the pack. Mexico came in with the highest total purchases at 132,400 MT.
“Notably, China was not the lead buyer as Mexico stepped in to purchase 132,400 metric tons likely in an effort to stay ahead of a possible run on U.S. pork by China,” Michaelson said on AgriTalk with Chip Flory.
The numbers were considerably higher from the week before and from the prior four-week average. In addition to a major increase for Mexico, sales for 2019 came in at 94,000 MT for China, Japan at 46,400 MT, South Korea at 9,900 MT and Canada at 5,800 MT.
For 2020, net sales of 58,900 were reported – mostly for China at 58,600 MT and Japan at 200 MT.
Meanwhile, 210,900 MT of pork – also a marketing-year high—have left the country. Quantities shipped were up noticeably from the previous week and from the prior four-week average. The pork exports primarily went to Mexico at 135,800 MT, Japan at 39,400 MT, China at 13,800 MT, South Korea at 9,500 MT and Canada at 7,100 MT.
Why didn’t the pork market react?
With a record 351,000 of pork export sales this week – 1.2 times the weekly slaughter in the U.S. – Arlan Suderman of INTL FCStone said he believes this is the beginning of bigger things to come, even though the pork market didn’t react Friday.
“We built in a premium long ago and we’ve been waiting for it to happen,” Suderman said on a U.S. Farm Report live on Friday. “Probably $14 worth of export premium was already into the market. We expanded the hog herd, now we are waiting for demand to catch up. Once that happens, I expect this market to catch a little fire again.”
Watch the U.S. Farm Report Facebook live below.
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