Craig Morris, Vice President of International Marketing, National Pork Board
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 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. And US pork exports are starting the year strong, just as we ended 2017. Craig, can you give us the latest data?
Craig Morris: 00:31 Well last week USDA – ERS released our January trade data and exports have really been quite robust so far. And we expect they’re going to continue to expand, really due to the dollar and a really effective marketing efforts that we had at the National Pork Board and our partnerships with US Meat Export Federation abroad. But they also had been a real case study in a way that is, as I like to say, we don’t want to put all of our bacon in one basket, is our impressive numbers are despite being way down in certain areas. When you kind of run through some of the high line information, pork and pork variety meat exports were some greater than 203,000 metric tons. That’s up about four tenths of a percent over January of 17, worth some $546,000,000, which is up fully seven percent over a year ago. So those dollars are something to really keep an eye on here.
Craig Morris: 01:26 It’s going to be a common theme throughout these numbers. Breaking that down, the multiple cuts accounted for a 164,000 metric tons. That’s the five percent over a year ago, worth some $454,000,000, which is fully up nine percent over a year ago. However, our pork variety meat exports were only 39,000 metric tons. That’s down fully 16 percent. But they were worth about 91.5 million dollars, which is actually up two percent. So a lot less volume of variety meat exports. Uh, but, uh, we were actually up by value. That makes our pork muscle cut exports to it’s the second highest January we’ve ever had, after only 2012. The growth was led by a number of really key markets. Japan was up 13 percent. Korea was up 14 percent. China, Hong Kong was 10 percent, Central America up fully 18 percent, Australia, New Zealand up nine percent.
Craig Morris: 02:30 Although exports to our top volume market, Mexico, were up only one percent year over year, it’s actually set a record for the month. So Mexico continues to be a very strong market for us. Even with modest year over year growth, without being a record export month, we had fully 59,000 metric tons of pork muscle cuts to Mexico in January. Exports to Korea set a record for the month at 17,000 metric tons. That’s up over two thousand metric tons from last January, which was also the previous record month. Exports to Japan and China, both of the highest we’ve had since 2014. Columbia. Columbia is a really important market that I want to talk about. It also set a record for the month, with the over 6,000 metric tons. That’s up five percent, that’s one of the reasons that the National Pork Board decided at the Pork Forum here last week to invest a $80,000 in a generic pork marketing campaign in Colombia.
Craig Morris: 03:31 We see pork in Colombia is a real, a great opportunity for US producers as we’re seeing the Colombian consumers really, really consumed, just frankly more pork. Now pork variety meats are another story, you know, as I talked about, although in line with the January 16 numbers, we’re well off our January 17 pace, being down some 27 percent to our top market of China, Hong Kong. But the value of that market, as I talked about, was down only three percent. So the volume was way down to China, again down 27 percent. But the value is only down three percent. That is the lowest exports to China since January 16. And for Hong Kong, that was our lowest since November of 15. Mexico was steady, with last year by volume, but value is up three percent. Korea was a real bright spot for pork variety meat exports, being nearly doubled, up 94 percent over last January, and the highest month we’ve had since April of 2014. The value of Korea was up a staggering, and this is just unbelievable, 147 percent for pork variety meats, worth fully 4.5 million dollars. Now, I think in summary, export value for pork and pork variety meats for January brought in some $50.93 a head. That’s up one percent or seventy cents a head processed from last year.
Don Wick: 04:53 How big a factor is the, is the value of the US dollar right now?
Craig Morris: 04:57 You know, I think that’s one of the big drivers. As I said, I think we’re doing really well for two reasons. One, we’ve put a heavy priority on diversification. Making sure, again, that we don’t have all that bacon in one basket. But one of the things that’s keeping us in those markets that are having strong demand, is a very competitive price point on our pork. You know, the muscle cuts are something we should be really, really proud of, you know, that’s something that we’ve been looking at Europe, we’ve been looking at their overproduction and worry that, obviously Europe is going to be very competitive in the muscle cut market. I think it’s, it’s something that we should take a lot of pride in that our muscle cuts did so well because, because at the end of the day, it’s pork muscle cuts that really carry the day for us in January and helped make January really the great great month it was for US producers.
Don Wick: 05:49 China’s been increasing their domestic production, but still they’re a pretty decent customer., aren’t they?
Craig Morris: 05:58 They’re an unbelievable customer! If you look at the top markets for US pork in 2018 so far, we’re looking at China, it’s like seven percent. So it’s, it’s a very important market for us. Mexico, Mexico is fully 40 percent right now of the volume of the pork that we export. It’s, it’s just staggering how important the Mexican market is. Japan behind that at 23 percent. Then you get to South Korea at 12 percent, Canada at nine, and Canada’s really a two way trade market, but then China, as you pointed out, now China is a market that seven percent of our production, but that’s fully product that’s going into China. So it’s, it’s really important, especially again, if we had a down variety meat month, then China is critically important to moving those variety meats because variety meats, in terms of real value per head, bring back something that has a residual cost here in the US, nowhere close to what we get for it in China.
Don Wick: 06:46 All this really corresponds with a significant investment made by the Pork Checkoff in these international markets.
Craig Morris: 06:53 That’s absolutely right. I think one of the themes that you’re going to hear from International Marketing Committee, as well as from the National Pork Board, is the importance of not only diversification, but one of the things we’re going to start talking more about is food foresight. Really understanding the pork consumer of tomorrow, where those consumers are and what they want. We want to make sure that the checkoff dollars is being expended in a way that really provides a sustainable environment for producers to expand today so that they know they have customers tomorrow, not only domestically, which we do so well with their domestic marketing program, but more and more our export. As I said earlier, January and some $50.93 per head came in from exports. Those are real numbers, bringing real returns back to US producers.
Don Wick: 07:40 Craig Morris from the Pork Checkoff. 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.