A bullish outlook on the U.S. pork market means it’s time to take advantage of opportunities that come your way, says Erin Borror, U.S. Meat Export Federation vice president, economic analysis.
“On the supply side, the fundamentals are bullish, and the markets have been saying that as well,” Borror explained at the Midwest Pork Conference. “Europe’s historic decrease in production – roughly 3 million metric tons – has resulted in a huge decrease in supply. They have stabilized at this lower level and we’re not seeing growth in Canada. It’s really the U.S. and Brazil that have been growing production.”
Brazil’s output did not grow as much as it was initially expected to grow in 2024, she added. The U.S. is leading – resulting in a production and export opportunity for U.S. pig farmers.
“On the export side, our growth has been across many markets and it’s really a two-fold story,” Borror said. “This has been the case since late 2022 where we have continued growth in consumption in Latin America. Those are “U.S. markets”, where we have dominant market and share free trade agreements. In Asia, it’s a mix of free trade agreement countries and those where we don’t have agreements, like in Southeast Asia. We had European product coming in at prices lower than ours once China’s buying slowed down after their ASF rebound. We have been retaking that share back from Europe since late 2022.”
Although those aren’t new stories, she pointed out, the two-fold dimension underpinning U.S. export growth has continued and is driving record exports again this year.
The U.S. is shipping a record share of its production. The dollars per head is at a record level, Borror added, with over 30% of pork and pork variety meats being exported at over $65 per head.
“We see potential for continued growth in export volume and value – basically a 5% increase in exports this year. That will be about $8.6 billion worth of U.S. pork exported and further growth next year and in the following year,” she said.
Strong U.S. Dollar Remains a Headwind
The economic situation has been challenging because of inflation. The U.S. isn’t the only one facing sustained higher prices.
“We also have the strong U.S. dollar. Especially for those import customers, they’re seeing much higher prices because of the impact on their purchasing power just through currency alone,” Borror said.
For example, Japanese customers are paying higher prices for imported product, but they are also seeing lower real incomes.
“There’s no room to increase prices. It’s been a challenging economic atmosphere,” Borror said. “But to me that makes the success of U.S. pork more exciting because we’ve found that sweet spot where it’s still an affordable, but high-quality red meat, and there’s clearly demand for that product in these markets.”
Despite food service’s recovery, at least to some degree post-COVID, Borror said there’s still been a lot of turmoil after COVID. U.S. pork has been a winner again because of that sweet spot in affordability despite the headwinds, and also because of its availability vis a vis Europe, she added.
It’s equally exciting to recognize the U.S. is exporting more product at higher prices.
“It really is a demand story,” she said. “Also worth noting that U.S. beef production decreased in 2023 and stabilized this year, but that limited U.S. beef availability and high prices also don’t hurt.”
Key Issues to Watch in 2025
From a red meat perspective, she said there are great opportunities for U.S. pork in the global market. Where she becomes a little uneasy looking ahead at 2025 is trade policy and what might happen next.
“We have to remember there are opportunities. Under the previous Trump administration, they did negotiate the U.S.-Japan Agreement and the China Phase One Agreement. We can look at the tariffs as a threat, but we can also think about how they may be used as a negotiating tool and consider other proactive opportunities,” she said.
The United Kingdom is one example where the U.S. red meat industry could use some proactive type of trade agreement. She said the UK is basically the only major importing market where the U.S. has virtually no presence.
“There are barriers that could be overcome and having that transactional type of approach could benefit us,” Borror added. “If President-elect Trump gets what he needs on illegal immigration, fentanyl and all these other issues, hopefully we can avoid a 25% blanket tariff. And that’s certainly the way the trade appears to be viewing it.
She thinks it could be a very exciting and very interesting 2025.
“We’re optimistic. I think there will be a lot happening, so we should be expecting some turmoil,” she emphasized. “Take advantage of opportunities when they’re given.”
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