Joe Schuele, vice president of communications for the U.S. Meat Export Federation, reviews the latest pork export statistics. It has been an excellent year for sales to Mexico. Schuele discusses that strength and more in this edition of Pork Pod.
Joe Schuele, Vice President of Communications, U.S. Meat Export Federation (USMEF)
Don Wick: 00:04 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 on behalf of the Pork Checkoff, and today our guest is Joe Schuele, who is the spokesperson with the U.S. Meat Export Federation. Of course, the Pork Checkoff works closely with USMEF on international trade development. The latest export numbers are in, and Joe, it looks like October was another good month for U.S. pork exports.
Joe Schuele: 00:34 Yes we were really pleased to see the October numbers. Pork had been a little bit flat year over year for the last couple of months but the October numbers were improved again. A lot of that related to rebound in Mexico. We’ve been having a great year in Mexico, on a pace for six consecutive volume record to Mexico. But the September numbers were down just a little bit. We saw those rebound in October and that was really good to see and led to a really good good month for pork exports.
Don Wick: 01:11 Mexico in particular is a big ham market. Is that part of what’s driving this?
Joe Schuele: 01:16 Absolutely. I really can’t emphasize enough how important our ham exports to Mexico are. Ham makes up a lot of the pork carcass and we produce a bit more than we’ll ever consume here in the U.S. We have stronger demand, we certainly have demand for hams in the U.S., but stronger demand for bellies, ribs, that kind of thing, and to produce the bellies and ribs that we need, you end up with more hams than you’ll consume and Mexico is a fantastic destination for those hams. Some of them used as a primary entree type of item, but a lot of it goes into further processing. We have big customers in Mexico that buy large volumes of hams and we’re able to serve that market very economically. They can go down there in a chilled state, don’t have to be frozen and boxed first.
Joe Schuele: 02:11 And so really, a critical market for us. And of course, the duty free access that we have under NAFTA is very important to that also, because even though we’re the main supplier to Mexico we still are concerned about stuff to compete with the domestic product and you’re concerned whenever you have to pay duties, that cuts into your consumer demand a little bit. So duty free access to Mexico certainly a critical factor in that growth.
Don Wick: 02:41 When we talk pork, we always focus in on Japan as well. Where are we sitting as far as moving pork into that destination?
Joe Schuele: 02:58 Having a solid year in Japan. Our volume and value up just a little bit over last year. We’re still not where we were a few years ago as far as Japan, that was almost a 2 billion dollar market. If you go back to the earlier part of this decade, this year through October we’re about 1.33 billion. We’ll probably get to a billion and a half by the end of the year. And those are excellent results, but not quite where we were earlier in the decade. Japan is an intensely competitive market. They have a rather complex system of tariffs and gate prices that make it somewhat difficult to serve that market. And up until now, we’ve kind of struggled with that along with all the other suppliers. What we are concerned about going forward is we’re still faced with tariffs and gate price system, whereas some of our competitors like the European Union and Canada and Mexico are breaking, are ready to break through that with some trade negotiations with Japan. So we certainly want to be on a level playing field with Japan. It’s a very high value market, extremely important to the U.S. pork industry. And right now the level of access that we have is a bit of a concern.
Don Wick: 04:14 Joe, you know, obviously, pork exports are very important for our pork industry. On a per head basis, are we seeing gains seen there as well?
Joe Schuele: 4:24 Yes, through October the per head, the value if you take our total export value for those 10 months, you divide that by the number of hogs slaughtered you’re at just under fifty three dollars per head and that’s up 7 percent from a year ago. That’s a very important metric because you don’t want to be exporting more product just because you have more. I mean we’re in a period of really record large production. So you would expect exports to be up in volume, but what’s really gratifying is to see that that export value and especially that per head export value increasing also. Because you don’t want to be putting product out on the international market at cheap prices that don’t provide a good return for the producer. A per head metric gives you a good measurement that producers are getting a good return for the hogs that they take to market.
Don Wick: 05:12 Thanks to you for listening to this edition of Pork Pod. For more information on this topic or the Pork Checkoff itself, visit pork.org.