by Malinda Geisler, content specialist, AgMRC, Iowa State University, malindag@iastate.edu

Profile revised July 2008.

 

Supply

The United States is the world’s second-largest producer of pork. China is the world’s largest pork producer with nearly half of the world's total production. As of December 1, 2007, USDA estimated 65.1 million hogs and pigs were in the United States, up 4 percent from 2006. Of that, 59 million were market hogs.

Demand

Pork is the most consumed meat in the world. With increasing global incomes, more consumers worldwide are shifting to meat-based diets.

World demand of pork continues to grow. As U.S. beef  and poultry markets gradually recover from disruptions caused by Bovine Spongiform Encephalopathy (BSE) and Avian Influenza, the Foreign Agricultural Service (FAS) says world pork consumption should continue to grow. The lower valued U.S. dollar also makes U.S. pork attractive to foreign buyers.
 

Imports

The United States imported 968 million pounds of pork in 2007. Pork imports were valued at $825 million.

Canada accounts for the majority of total U.S. pork imports. Live hog imports totaled 10 million head in 2007. USDA reports 66 percent of the live imports are typically feeder pigs. The remaining percent are slaughter-ready animals. FAS claims the United States and Canadian pork markets are increasingly integrated in the movement of live pigs. 

Denmark comprises 10 percent of U.S. pork imports. A significant share of the imports is baby back ribs. Denmark produces a smaller animal compared to the United States, thus more suited for baby back ribs. According to USDA, U.S. demand for imported pork is also affected by the depreciated U.S. dollar. The Canadian dollar and the Danish krone are currencies the U.S. dollar has depreciated against.

Exports

About 11 percent of U.S. pork production is exported. In 2007, 3.1 billion pounds were exported, the largest amount ever exported. Pork exports that same year were valued at approximately $2.4 billion. U.S. exports continue to grow with strong demand, particularly from Russia and South Korea. U.S. exporters benefited from ongoing Russian health restrictions on Brazilian pork.

Japan is the largest customer of U.S. pork. It accounted for 34 percent of total U.S. exports. U.S. exports of frozen pork have maintained growth in the Japanese market. In recent years, U.S. pork exports benefited from increased volume when Japan closed its borders to U.S. beef.

Other key export locations for U.S. pork are Mexico and Canada.  Economic growth and the ongoing development of the Mexican retail sector have contributed to Mexican demand for U.S. pork exports. Canada is third in tonnage purchases from the United States.

Live hog exports from the United States have averaged less than 1 percent of total U.S. hog slaughter. In 2007 the United States exported 136,716 live hogs. More than 90 percent of the live exports go to Mexico with the balance being sold to Asian countries as breeding stock.

Competition

The United States competes with Canada for export sales to Mexico. The European Union is a primary competitor for pork sales to Japan. Overall, strong export competition is also being experienced from Brazil and the Russian market. The Pacific Rim and Mexico will continue to be growth markets for U.S. pork.

Long-term Competition  

USDA’s Agricultural Baseline Projections to 2017, released in February 2008, indicated Brazil as a major pork exporter. Yet, until other countries recognize Brazil as free of Foot and Mouth Disease (FMD), it will limit Brazilian pork producers' ability to compete in some markets.
 

Production costs and environmental regulations, rather than production efficiencies by competing exporters, will influence long-term gains in U.S. pork exports. According to USDA, countries such as Brazil with growing pork industries tend to have lower costs.

Key exports markets for U.S. pork will continue to be Mexico and Pacific Rim countries. Canada remains a competitor to the United States for these markets.

The value of the U.S. dollar relative to other pork exporting country's currencies is expected to help U.S. pork export volumes.
   

Traceability

According to the U.S. Meat Export Federation (USMEF), some countries are using safety as a form of protectionism. Asia and Europe, for example, are increasingly making traceability a condition of market access. The United States offers limited traceability on its pork exports.

According to a 2001 study by the Gallup organization of British consumers, 23 percent indicated basing their meat and dairy purchases on country of origin. USMEF estimates 39 percent of all pork imported to Japan is consumed through foodservice. Most Japanese restaurants do not identify the country of origin for their products. One nationwide chain, Wako, has begun identifying U.S. pork.

Related to traceability is the country-of-origin labeling (COOL) program, which was included in the Farm Security and Rural Investment Act of 2002 (2002 Farm Bill). The labeling program is mandatory as of September 30, 2008. The Agricultural Marketing Service is responsible for enforcing and regulating COOL.

Sources

Europe - Pork Profile, U.S. Meat Export Federation.

Hogs & Pigs, National Agricultural Statistics Service, USDA.

Japan - Pork Profile, U.S. Meat Export Federation.

Leuck, Dale, Mildred Haley, and David Harvey, U.S. 2003 and 2004 Livestock and Poultry Trade Influenced by Animal Disease and Trade Restrictions, Economic Research Service, USDA, 2004.

Livestock, Dairy and Poultry Outlook, Economic Research Service, USDA.

Meat, Livestock, Poultry and Egg Analysis, Foreign Agricultural Service, USDA.

  
USDA Agricultural Baseline Projections, Economic Research Service.