By Kevin Waetke
From learning more about U.S. pork promotions to seeing firsthand how consumers shop the super- market aisles, the Pork Checkoff’s recent trade mission to Japan and China focused on new and expanded export opportunities for America’s pig farmers.
Pork producer leaders Terry O’Neel, Friend, Nebraska; Steve Rommereim, Alcester, South Dakota; and Brett Kaysen, Nunn, Colorado; along with senior staff Bill Even and John Johnson, spent 11 days in Japan and China in September to assess the market environment for U.S. pork.
Asia-based U.S. Meat Export Federation (USMEF) members accompanied the crew. The Pork Checkoff works with the USMEF to research and develop new markets and expand the existing customer base for U.S. pork.
“Pork is the most consumed protein in the world, which was obvious as we toured parts of Japan and China,” said Even, who is the National Pork Board CEO. “It is important for us to see how pork is raised, processed and promoted in Asia and understand each country’s unique marketing needs.”
The team met with pork processors, distributors, retailers and importers. “We gained valuable insights at every stop, including at Japanese supermarkets, ” said Rommereim, who is vice president of the Pork Board. “Japanese shoppers are very engaged, studying purchases more than many Americans.” He added, “Many shoppers picked up various cuts of pork and intently studied their color and consistency. With limited refrigerator space at home, buying their food is an everyday event. They focus on freshness and a good eating experience.” While the U.S. faces record-breaking pork production, the Pork Checkoff must grow demand – not only domestically, but also among top Asian customers.
Key U.S. Pork Markets
By volume (pounds), China/Hong Kong and Japan are currently the No. 2 and 3 U.S. pork export customers, with a combined volume of 735,000 metric tons (or about 1.62 billion pounds). In terms of U.S. dollar value, Japan is No. 1 and China/Hong Kong is No. 3, with $2.2 billion of pork exports combined. Value and volume figures are according to USMEF data through October 2017. U.S. pork faces global pressure, according to Even, with chilled pork from Canada viewed as high quality and the European Union looking to aggressively expand in Asia since the Russia market closed. O’Neel, who serves as president of the National Pork Board, agrees. “Marketing pork around the globe comes down to building long-term relationships and offering a safe, dependable, high-quality product that is presented well to the buyer,” O’Neel said. “Consumers are encouraged to experience U.S. pork through fun events and social activities.” In Japan, Gochipo is the mascot and centerpiece of the USMEF’s marketing campaign that extols the virtues of high-quality, delicious U.S. pork. The Pork Checkoff team toured AEON, a major Japanese retailer, during a U.S. chilled pork promotion that featured Gochipo. “Japan is roughly the size of California, with a population of 120 million people and 61 percent of their food needs are imported,” Rommereim said. “The growing middle and upper classes demand high-quality, fresh, convenient meat.” Japan can only meet half of its meat consumption needs with domestic production, so imported pork products are critical. “My main takeaway from the Japanese portion of the trip is that U.S. pork plays a vital role in the diet,” said Brett Kaysen, Pork Board treasurer. “No matter the retail outlet in Japan – from discount to high-end – U.S. pork is present.”
Team Learns about China
After five days in Japan, the Checkoff trade team moved on to China, where O’Neel and Even presented the U.S. pork production perspective at the annual China Swine Industry Symposium. O’Neel spoke on managing financial, environmental and labor risk in U.S. pork production. “The Beijing symposium was an outstanding experience, and I was honored to represent America’s pig farmers and discuss the challenges we all face in managing risk,” O’Neel said. “For example, China has a very volatile hog price cycle primarily because hog prices are closely tied to the price of pork at the consumer level,” he said. “With more than 50 million producers currently farming in China, you can imagine the wild price swings that can occur. Risk management is fundamental to success.” At the symposium, Chinese presenters defined a few price risk management solutions, which included transitioning from smaller, backyard production to large, modern, integrated production techniques. They also discussed the role that China’s government programs and policies can play. “China’s producers and consumers are a little uneasy about importing pork because self-sufficiency
in food production is a long-standing cultural norm there,” O’Neel said. “China currently imports 40 to 50 percent of its soybean needs, and it does not want to be overly reliant on pork imports.”
Vast Market Offers U.S. Big Opportunities
China is a huge market for the United States both in terms of volume and opportunity, Rommereim noted. “While China is 96 percent self-sufficient in pork production, we need to further our outreach efforts here,” he said. “To keep things in proportion, 5 percent of China’s pork consumption is equal to the total annual U.S. pork production.” He added, “China has an estimated 50 million pork producers. That’s how vast this market is.” The trade team was impressed with the economic growth and infrastructure development that the trade team saw in China. This level of growth can only point to greater dependence on foreign market imports, the group concluded. “I envision cold pork storage experiencing dramatic growth as the Chinese population grows and as the country continues to consume more meat,” Kaysen added. “Our job is to make U.S. pork truly recognized in the meatcase at the retail level in China as much as it is in Japan.”
Lot of Food for Thought
“Through this trade mission, our leadership gained a greater understanding of the growing Asian market. including where U.S. pork is doing well and where we can do more to improve,” O’Neel said. “While we all face similar issues, food safety, environmental concerns and the growing cost of production clearly top the list of Asia’s concerns.” O’Neel points to the fact that pork production costs are more than twice that of the United States, largely due to the high cost of feed and less efficient production. Including both muscle cuts and variety meat, U.S. exports have increased to 26.4 percent of total production. This growth is the result of developing Asian customer relationships and working with USMEF and the National Pork Producers Council, O’Neel said. “As the U.S. pork industry expands, our dependence on these markets becomes even more important and valued,” Rommereim said. “Through increasing our level of knowledge of these markets, we are better qualified to invest Checkoff dollars wisely to expand exports.”
The National Pork Board recently participated in a joint meeting between the U.N. Food and Agriculture Organization and the China Association of the Promotion of International Agricultural Cooperation (CAPIAC). The International Cooperation Committee of Animal Welfare, a subgroup of the CAPIAC, focused
on animal welfare. At the conference, Sherrie Webb, director of animal welfare for the Pork Checkoff, shared U.S. pork producers’ experiences with the Pork Quality Assurance® Plus program and the Common Swine Industry Audit. She said both programs focus on continuous improvement tools and help ensure that animal welfare remains a top priority. As a sign of collaboration, the secretary general of the ICCAW attended the Checkoff’s Pig Welfare Symposium in November and presented a special pre-session discussion about China’s pork industry and welfare-related issues.
Craig Morris has joined the National Pork Board as its new vice president of international marketing. He most recently was deputy administrator over the Livestock, Poultry and Seed Program of the Agricultural Marketing Service (AMS) at USDA. For the past 25 years, Morris has held high-profile strategic leadership roles with the federal government, industry associations and in the private sector. He has extensive experience in international trade, shaping the country’s livestock marketing strategy and building comprehensive export programs that meet the needs of industry stakeholders both here and around the world. “I have been fortunate to have served the livestock industry for my entire career, and I look forward to pouring that passion into developing a strategy to market U.S. pork products abroad,” Morris said. Key achievements include building the export verification programs that the livestock industry depends on to market products; reaching international consensus on issues such as meat quality, animal welfare and social responsibility; assuring consumers about responsible antibiotic use in livestock production through the USDA’s Process Verified Program; and providing oversight of the USDA’s Country of Origin Labeling Program. “We welcome Craig to the Pork Checkoff,” said National Pork Board CEO Bill Even. “The marketing and global promotion of U.S. pork has never been more critical for America’s pork producers. Craig’s extensive knowledge of the pork industry, export markets and consumer preferences will elevate the role during this crucial time for our industry.”
“Japanese shoppers are very engaged and study purchases more than many Americans… They focus on freshness and a good eating experience.” – Steve Rommereim, South Dakota