Destination - Southeast Asia
Bill Even, CEO , CEO National Pork Board
Don Wick: 00:01 From the Pork Checkoff in Des Moines Iowa it’s Pork Pod! Pork Pod, a look at the hot topics in today’s pork industry. The Pork Checkoff is working for you through various forms of research, promotion and consumer information projects. This is Don Wick speaking on behalf of the Pork Checkoff, and today our guest Bill Even, CEO of the National Pork Board, and Bill along with members of the National Pork Board in Japan and China right now. Bill tell us about this international experience.
Bill Even: 00:30 Thanks Don. So the National Pork Board is responsible for the international marketing and promotion of all U.S. pork products in conjunction with U.S. Meat Export Federation as our partner. And here right after Labor Day the officers of the National Pork Board, myself and John Johnson our Chief Operating Officer will be taking off for Tokyo. And when we get to Japan at one of the primary focus areas and be as Japan is the U.S. meat seminar that is celebrating its 40th anniversary now in Japan, where we have the opportunity to be in front of seven to nine hundred key Japanese business people in the retail market in the consumer aspect as well as from the food service industry. So it’s a fantastic opportunity showcasing U.S. pork in what is their, will be their, 40th anniversary celebration.
Don Wick: 01:35 How important is it to showcase U.S. pork in front of that global audience.?
Bill Even: 01:44 Well let me put some numbers behind it Don. So 20 years ago the United States was United States is a net pork importer. And here we are 20 years later we’re at 26 percent of U.S. pork production is being exported internationally. And that number is expected to get to probably 30 percent here in the next year, increase in exports. And so the international component of U.S. pork production and agriculture is going to live or die by that export piece now. And so when you look at who are our major export markets, Mexico, Japan, Canada, China and Korea round out the top five, with Japan consistently being either number one or a close number two and the value of U.S. pork sold internationally. So Japan has been an incredibly fantastic trading partner and market for US pork. And we have seen over the past few years the European Union and pork out of Europe has now started to move into those Asian markets including Japan. So the competitive pressures U.S Pork industry is facing in Japan really ratcheted up in probably the last couple of years.
Bill Even: 03:00 So it’s really important that we show up there you know loud and proud, demonstrating and differentiating our product to our European competitors.
Don Wick: 03:13 U.S. differentiates itself somewhat with that high value chilled pork product. Japan is got to be very important to be taking that type of commodity us.
Bill Even: 03:21 Absolutely Don. You hit on it so because of our proximity to Japan and our ability was modern cold chain to move products from the U.S. chilled fashion the Japanese economy is very advanced. They’ve got high levels of disposable income and their taste in food is much you know like the United States, and so many of the higher end or cuts and I would characterize as muscle meat that doesn’t get consumed the United States is sold at very good premium in Japan. And so to date it has been difficult for the European Union to move around the world and their supply chain without bringing in frozen product.
Bill Even: 04:02 So we got a bit of a competitive edge there that we really need to lean on and quite frankly that that high dollar high end market that Japan represent really helps to cut out the value of us hog. And therefore you know maintain profitability for the produce.
Don Wick: 04:25 From Japan you’re going to China and we know they’re the 800 pound gorilla in the world marketplace. What do you anticipate as you move into that into China?
Bill Even: 04:35 Yes so China with 1.3 billion people, they’re the largest hog producer in the world far and away. Their production systems, while, rapidly modernizing still the lion’s share run of the mill Chinese pork production is occurring in relatively small scale or farming that we would argue look pretty similar to what we would have the United States in the 1950s for example. Their industry is modernizing and their disposable income that rapidly increases meat in their diet also increases with it. So right now while China has moved into the pork importing markets, pretty heavily the last few years we’ve also found that the European Union is aggressively moved into China. And in that Chinese market increase U.S. has been able to grab about 20 25 percent of that where the European Union and others have grabbed you know 70 75 percent of it. So, I think there’s a multitude of reasons, Don.
Bill Even: 05:45 You know the sanctions on Russia when they invaded the Ukraine and seized Crimean, those sanctions essentially shut off Russia as a pork marketer, pork destination to the European Union. It quickly shifted gears and they’re moving their direct competition to the US. So we’ve got to be bringing our A-game now.
Don Wick: 06:07 You’re getting to face time with some pretty important buyers. How important is it to be developing those relationships Bill?
Bill Even: 06:13 There’s different organizations that function in this international marketplace report. So if you look at the National Pork Producers Council the industry’s trade association. They have been very successful with Nick Giordano, Neil Dierks at the helm there and really working with U.S. trade representative office and opening markets for pork.
Bill Even: 06:34 They’ve been instrumental in helping negotiate trade deals and lower tariffs on our products internationally. So if you kinda look at those are the folks that go in and you know open up those markets and then once the markets are open that’s where the Pork Board and U.S. Meat Export Federation swinging action with Checkoff dollars this year international marketing is going to be around 8 million dollars of the Checkoff is going to move into that space. And our job is to evaluate the market on the ground understand the retail consumer cold chain and then understand how do we start position our pork into those markets. So we work really closely with the packers, the processors as well as importers and exporters to make sure that that happens.
Don Wick: 07:21 When you take a look at where we’re sitting with the production at this point those export market is going to be very important.
Bill Even: 07:32 Absolutely. We we’re in back to back years of record U.S. pork production and that’s exports. Knock on wood, have held up pretty strong. The cut off value is cut out values been strong here this year. Now markets always drift lower in the fall and we’ve seen that here in recent weeks the sell off the October and December pork contract. But, fundamentally 2017 has been a good year to date. Prices were much stronger than anybody anticipated in a large part that was due to exports.
Bill Even: 08:06 Bill Even from the National Park Board. Thank you for listening to this edition of Pork Pod. For more information on this topic or the Pork Checkoff itself, visit pork.org.