The December trade data is a little bit like Christmas for Brett Stuart, economist and co-founder of Global Agri-Trends. And 2021’s data was a pretty big gift for the U.S. pork industry that has been working hard to grow export value and opportunities. Since 2010, U.S. pork exports have grown more than 50% in volume and 60% in value.
In 2021, U.S. pork producers captured $61 of export value per hog. That’s a record high, Stuart says, and an impressive accomplishment for the industry. Export tonnage was down 2%, but the dollar value was up 6%. The U.S. exported $7.8 billion of pork and pork variety meats last year.
“Even though our tonnage was down 2%, and you have to remember the previous year was up 15% because of China, if you trendline that, we are in great shape,” Stuart says.
The U.S. exports a lot of variety pork products. Bill Luckey, a Nebraska pork producer and member of the National Pork Board Board of Directors, says this is a big benefit to the producer and packer.
“$61 per head – that’s pretty substantial. We export a lot of product that has more value in other countries than what it does here. So it’s very important that we maintain those markets so we can maintain that price from the export market,” Luckey says.
China: No One Saw That Coming
Stuart says he can’t wait to dig through the year-end data and look at all the numbers, going back and comparing forecasts to see who was right and who was wrong.
“We’re all wrong when I look at forecasts,” he laughs. “I’ve went back and looked at my forecast from a year ago and I had forecasted U.S. pork exports down 2% for the year. They came out down 3.5%. I thought, ‘Wow, that’s fantastic.’ Then I went and looked at some of my key assumptions and some of the exports by market and thought, ‘Wow, I was lucky.’”
A lot of things happened in 2021 that no one could foresee. Especially what happened in China.
“I don’t think a year ago we really expected how quickly we would see Chinese demand drop,” he says. “And those Chinese prices. Chinese hog prices started to decline in January a year ago. And by the end of the year, the Chinese hog market fell in price by 67%. And our exports fell with it.”
U.S. pork exports to China fell sharply, down 44% from the prior year. But Stuart says when you look at that big market dropping 44%, it’s pretty incredible the data looks like it does from 2021.
Mexico Keeps Going Higher and Higher
The U.S. had record tonnage to Mexico, up 27%. U.S. pork also boasted record value, shipping $1.6 billion in pork to Mexico last year.
“When I look at that Mexico chart, it’s like an infinite growth curve chart,” Stuart says. “It just keeps going higher and higher, just when I think it’s maybe stalling out.”
Clay Eastwood, director of international market development for National Pork Board, pointed out that the Pork Checkoff has been executing programs in Mexico specifically over the last couple of years to try to increase consumption of pork loins and all of the sub primals that that come along with bone-in pork loins.
“That’s one of the ways we’ve tried to think bigger picture to diversify our markets, but also diversify cuts that are going into a market because Mexico is historically hams,” Eastwood says. “That’s been an area where we’ve tried to increase value by differentiating products within a market.”
Don’t Discredit Domestic Demand
U.S. domestic demand was very good, too. Retail prices moved higher.
“Sometimes when we see strong domestic demand, it’s hard to get export growth with that. But this just shows the durability of those global markets,” Stuart says. “Because even when we had U.S. consumers with strong demand for pork, the export markets stepped right in toe-to-toe and were able to bid away their share as well. I think it’s all great news for the U.S. hog and pork sector.”
Learn more about the year-end export data here.
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