Latest Export Numbers, May 2018

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In this edition of Pork Pod, National Pork Board vice president of international marketing Craig Morris reviews the latest export data and highlights the challenges ahead. Records are being broken.

Host

Don Wick

Guests

Craig Morris, VP International Marketing, National Pork Board

Length

07:01

Transcript

Don Wick: 00:04 From the Pork Checkoff in Des Moines, Iowa, this is 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. I’m Don Wick speaking on behalf of the Pork Checkoff and today our guest is Craig Morris, who is the Vice President of International Marketing for the National Pork Board. Craig, a lot of data has been coming through as of late. The export numbers. We saw the supply and demand report coming out from USDA, giving a pretty good look at what’s going on with the hog supply as well as what’s going on with the export picture. Brings us up to date where we’ve been. Where are we going.

Craig Morris: 00:44 I think the 2018 export picture is starting to come into better focus. We now know that we’re going to have record pork production this year and not only the United States but in the European Union and Canada as well. We’re seeing a production rebound in China. So globally that’s looking at about two percent more pork, which will record hundred and 113.5 million metric tons of pork produced. There’s a number of reasons I think that we’re seeing the expansion going on around the world and we’ve got really good economic growth both in developing and developed markets. We’ve had pretty sustained a low feed cost and we’ve honestly had pretty limited disease on packs a fueling this, the expansion that we’ve seen in the pork sector.

Don Wick: 01:29 When you take a look at the US in particular, where do you see export growth? What kind of sales have we had as of late?

Craig Morris: 01:39 Well, I mean, if you want to look at the February numbers, I think they’re pretty indicative of where we’re going to have growth this year. Last week we had the release of the February pork export numbers, uh, both pork and pork plus port variety meat export set records for the month of February on both volume and value basis. The growth and year-over-year pork muscle cut exports was really led by Korea. Korea, it’s growth exceeded the growth in the next four markets combined almost next five markets, which is really stunning. But Korea, we had a huge growth in it year over year, uh, South America, Canada, Central America actually for pork muscle cuts we had some growth in China, Hong Kong, and then also in the Caribbean. We have more modest growth and Taiwan and the region and we actually had some contraction in Mexico, Australia, New Zealand, and just slightly to Japan.

Don Wick: 02:37 When we look at the export value on a per head basis, have we seen any growth there? What’s happening?

Craig Morris: 02:44 Absolutely. Um, we’ve actually got a complete records and a number of departments. So in total, the record, February numbers mean that work plus pork for writing the exports accounted for 27.8 percent of US production and you value that at $56.78 per head process. That’s a $4.84 a head from last year are fully up nine percent. That’s really, um, those are amazing numbers. If you look at, you know, we’ve got a number of markets to look at that, that are really fueling the growth. We’ve had exports to Canada. It was the highest since 2013, highest February since 2013. South America setting records across the board, larger volumes in Colombia, Chile and Peru. Peru actually send them a month record la in February, Central America sending records as well as I pointed out, led by our top market, Honduras. Uh, but we also had really strong growth in February in Panama, El Salvador, Nicaragua. Pork variety meats, those were in February the area that we have the most concern over. Are they in February, maintained their slow pace that we saw a January start out with mainly due to trying to China, Hong Kong. Demand in China, Hong Kong is his not been for pork variety to what it was a year ago. Although in February we were up, uh, over January of this year, we’re still down from boy 22 percent from the year prior. So variety meats is something that we’re going to have to keep an eye on.

Don Wick: 04:19 Seen a lot of Trade Related News in the last a week or so, obviously the positive news of US pork now going into Argentina, I’m also some anxiety with what’s going on with the traits spat with China and trade sanctions. I shouldn’t say sanctions. The trade tariffs. What uh, what does you see as some of these outside influences? What influences does that have on this trade?
Craig Morris: 04:48 It’s going to be a really challenging international marketing environment for US Pork. This is the fourth consecutive year of strong production growth in the combined major exporters. As I pointed out, Europe, Canada, United States, we’re all going to produce more pork this year and we’re going to need to export that pork to maintain producer profitability. As was the case last year of the US who’s going to lead the major exporters and production growth and export volume growth. We’re estimating in the US increased production in the 4.8 percent range and we’re going to need to see our exports increase commensurate with that as well. I think from the United States perspective, what we’re really focused on is setting not only new record, uh, you know, in markets that have been important for us, Mexico, Korea, Philippines, Taiwan, Central America, South America, we’re going to need to depend on them, uh, to offset the slowdown that we’re going to experience obviously in the China, Hong Kong region that aren’t just tariff related but are frankly even demand related.

Craig Morris: 05:53 And then obviously another major world player in the market, Brazil, and they’ve lost their very important market of Russia. And although we’re expecting Brazil’s productions decline a little bit, that’s going to be a lot of additional pork that’s going to find its way into market like China, which had been important for us historically. So that’s a really good case for why the United States needs to make sure that we’re diversifying our marketing efforts. Looking at markets like Korea, which had been so important for us this year in Mexico, which over the last several years is really fueled US exports expansion. But then the really important historical markets of Japan and Canada are going to be important. And then these smaller markets, but experiencing huge growth Central and South America, they’re all going to serve as really important key markets for us to watch in 2018 as we deal with that really challenging environment. We have certainly in the in the China, Hong Kong region.

Don Wick: 06:53 Craig Morris from the National Pork Board. Thanks to you for listening to this edition. For more information on this topic or the Pork Checkoff itself, visit pork.org.