US pork exports hit by trade wars

By Aidan Fortune contact

- Last updated on GMT

US pork exports hit by trade wars

Related tags: Pork

The US pork market has been hit hard by a litany of trade battles in recent months, particularly with Mexico according to the latest Agriculture & Horticulture Development Board (AHDB) Pork report.

The report found that the US exported 848,500 tonnes (t) of pig meat during the first four months of this year, 6% less than in the same period last year. AHDB attributed this drop in exports to the Mexico situation, with shipments falling 19% on the year. This was a direct result of the introduction of tariffs. Fresh and frozen pork made up the majority of the decline. Meanwhile, exports of fresh offal increased by 20% to 17,000t.

Following the removal of the 20% tariff of US pork in May, AHDB said the market was likely to see a lift in export volumes in the near future, although its analysts were unsure if exports would return to pre-tariff levels.

China drop

US exports to China also declined, due to the introduction of tariffs. However, volumes were only down 4%, which was considered fairly muted given that US pork is now subject to a 62% tariff. Shipments to Japan also fell by 8% on the year, due to a loss of market share as result of the EU-Japan trade agreement.

Exports to Canada increased this year, by 8% to reach 86,800t. Again, this was mainly due to increased shipments of fresh and frozen product, although not enough to compensate for the loss of exports to other nations.

AHDB reported that US hog prices gained some significant ground earlier on this year. Lean pig prices in April and May were up 45% and 28% on year-earlier levels respectively.  Meanwhile, futures prices have been described as “volatile”​, rising at first on news of African swine fever (ASF) in China, and the hope of strong export demand, and then falling back due to a lack of progress in the trade talks.

Prices have been supported by stronger demand due to an expanding processing industry. Stronger demand is likely also a reflection of positive market sentiment in relation to the potential lift to exports to Mexico following the removal of the tariffs and to China, due to that nation’s pork deficit.

While the US may not be able to full capitalise directly on exporting to China, it is believed there is the opportunity to fill secondary demand, as other major exporters direct supplies into China.

The country’s biosecurity measures against ASF have also stepped up. In May, the US Department of Agriculture announced it would begin testing diseased and fallen stock for the disease. This is in the hope that ASF could be contained if detected.

Related topics: United States, Others, Products, Pork

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