Monthly Market Highlight

In the past decade, Chile has become a growing destination for not only pork but many U.S. goods. The United States-Chile Free Trade Agreement has helped open and develop markets between the two countries since its adoption in 2004. After the elimination of all tariffs in 2015, exports to Chile have grown considerably. Although the 23-day transit time between the U.S. and Chile creates some export complications, Chile has and will continue to be a surging market for U.S. pork.  Pork and pork variety meat exports to Chile totaled 69.4 million pounds in 2018, up 76% since 2016. The value of these exports totaled $91 million, a 69% increase from 2016.

Expansion and rebound of U.S. Pork Exports to Chile over time. 
Source: USMEF, Global Trade Atlas

Overview of Chile

Chile is in the southwestern part of South America and shares borders with Argentina, Bolivia, Peru, and the South Pacific Ocean. Chile is known for its unusually narrow shape. The country has about 4,000 miles of coastline but averages only 110 miles across east to west. The population of Chile is 17.8 million, with 88% of Chileans classified as urban citizens. Chile’s diverse landscape contains regions of desert, rainforest, and tundra as well as several valley and mountainous areas. Chile is the 26th largest export market for U.S. agricultural products with exports totaling $968 million in 2018, a 113% increase in the last decade.

According to the USDA, 2018 U.S. agricultural exports totaled $968 million, a 113% increase from 2008.
Source: USDA

Animal Protein Consumption and Domestic Industry

Meat is a major component of the Chilean diet. Annual meat consumption was 166.4 pounds per person in , ranking Chile among the top meat consuming countries in the world. Poultry is by far the most consumed animal protein with per capita consumption measured at 79.53 pounds per person in 2018. Pork and beef were evenly matched for second place at nearly 42 pounds per person. Since 2000, per capita consumption has grown for all animal proteins, but poultry has grown more rapidly than pork or beef. As incomes have become more stable, the growth of total per capita consumption has slowed. Poultry is also the leading protein in production, followed by pork and beef. ChilePork data shows that domestic pork production has been trending downward over time and reached a decade low in 2017. Furthermore, 60% of Chile’s domestic production is exported, and this percentage has been steadily increasing over time. data shows that domestic pork production has been trending downward over time and reached a decade low in 2017. Furthermore, 60% of Chile’s domestic production is exported, and this percentage has been steadily increasing over time.

Poultry and beef consumption have seen slow growth in the last ten years while pork consumption has remained fairly constant.
Source: OECD

Retail Sector

According to a report by the Global Agricultural Information Network (GAIN), Chilean consumers are becoming increasingly conscious of their eating habits and overall health. Retailers have reported a rapidly growing segment of products targeted towards this audience, including products lower in fat and sugar. Chile has also implemented a new Nutritional Labeling Law that requires special labels on products exceeding certain levels of sodium, fat, sugars, and calories. Supermarkets remain the most popular grocery retailers but are steadily losing market share to mid-sized grocers and specialty stores. These smaller stores offer a smaller variety of products but are greater in numbers and have convenient locations. U.S. products are considered high quality and are known for providing good value to Chilean consumers. The United States ranks second in consumer-oriented food import volume behind Brazil.

Looking Ahead

The United States owns the largest share of pork imports at 37%. The remainder of imports are supplied by Canada, Brazil, Spain, Poland, and Italy. According to the GAIN study, U.S. pork may have an advantage in this market due to its reputation of low prices, high-quality products, and well-known brands. GAIN also reported that major retailers in Chile have locations in other Latin American countries, making Chile a potential gateway for U.S. pork into new markets. However, while the United States-Chile Free Trade Agreement allows for zero duties on U.S. products, Chile also has free trade agreements with 65 other countries. Additionally, Chile has strict regulations on fresh products and has implemented new labeling laws that may complicate trade.

The U.S. Meat Export Federation (USMEF) has worked to establish a more significant presence in South American markets since 2011 and has identified Chile as a target for export growth. USMEF representatives continue to build and maintain the confidence of buyers by reinforcing the reputation of U.S. pork as a consistent, safe, and high-quality protein source. Further marketing efforts combined with the downward trend of domestic pork supply in Chile provide promising opportunities for U.S. pork exports in the future.