USMEF predicts fall in US market share amid Mexico pork tariffs

By Ashley Williams contact

- Last updated on GMT

If the EU and Canada increase pork supplies to Mexico, then US exports could dramatically drop
If the EU and Canada increase pork supplies to Mexico, then US exports could dramatically drop
The US Meat Export Federation (USMEF) has anticipated a sharp drop in US market share if the EU and Canada decide to increase pork supplies to Mexico.

USMEF believes that if the EU and Canada up their supplies to Mexico, then the US market share could decrease from the 90% registered during the first quarter to 75% for the second half of the year.

The decline in market share could result in a decrease in US exports of around 10,000 metric tonnes per month or more than 60,000 metric tonnes for the remainder of 2018.

The predictions came after USMEF issued a report on the current and potential losses to the US pork industry from retaliatory tariffs, with a focus on Mexico.

Mexico imposed a retaliatory 10% tariff on US pork​, which will increase to 20% from 5 July, after President Donald Trump introduced tariffs on steel and aluminium imports, sparking a negative reaction among US farmers.

Following the decision made by Mexico, US farmers said the escalating tariffs on pork would “devastate” pork-producing families​ across the country.

If unit values hold at Q1 levels, the drop in export value to Mexico would be more than US$100m over six months,​” USMEF said in the report. “Given the growth in US production and already large US consumption, it is likely the product ​[pork] not going to Mexico will be absorbed in other export markets, as well as in the domestic market, at lower prices​.”

Around 60 EU slaughter plants are approved to export to Mexico, with more pending approval. The report added that European exporters were optimistic about opportunities in Mexico, especially in light of the upgraded EU-Mexico free trade agreement, which is expected to be implemented by 2020.

Meanwhile, Canada took a step closer to enhancing its export markets after implementing the Comprehensive and Progressive Trans-Pacific Partnership​ legislation in the Canadian House of Commons this week.

The implementation will allow Canada to work with 11 countries, including Mexico, as part of a trade agreement.

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