Recently, China added an additional 25 percent tariff to all U.S. pork products, increasing the total tariff on U.S. pork and pork products to exceed 70 percent. This increase in tariffs has essentially stalled all U.S. pork exports to China. Simultaneously, Mexico increased their tariff on U.S. pork products, which includes U.S. hams, to 20 percent this month. Despite these tariffs, U.S. ham exports to Mexico have not dropped significantly. However, it is likely that Mexico will begin looking for other long-term suppliers for hams and other pork products in light of the current tariffs.

pork and pork variety meat exports to China and Mexico
Source: U.S. Meat Export Federation

Global Pork Outlook

  • 2018 Global production is likely to increase by 2 percent to 250 billion pounds. This increase in production is primarily due to the significant increase in Chinese production coupled with simultaneous U.S. and EU production increases.
  • 2018 Global exports are forecast to be 1 percent higher this year due to an increase in demand and decrease in prices. Mexico, Hong Kong, Philippines, and Taiwan lead the increase in global pork demand.
  • China is most likely the destination for the Brazilian pork displaced from the Russian market, especially now that U.S. pork cannot compete in the Chinese market due to the recently imposed tariffs.
  • Russia continues to decrease its pork imports, forecast to be only 440 million pounds in 2018. This decrease is due to a combination of the recent ban on Brazilian pork products (which accounted for roughly 90 percent of their 2017 imports) and increase in its domestic production capacity, which is nearing self-sufficiency.

U.S. Pork Highlights

Total Pork Exports
  • June
    • Pork Exports: 337 million pounds, +1 percent
    • Pork variety meat (PVM) Exports: 84 million pounds, -21 percent
    • Pork and PVM Exports: 421 million pounds, -4.5 percent
  •  January – June
    • Pork Exports: 2.25 billion pounds, +6 percent
    • PVM Exports: 558 million pounds, -12 percent
    • Pork and PVM Exports: 2.8 billion pounds, +2 percent
Value of Pork Exports
  • June
    • Export value per head: $53.13
    • Exports accounted for percent of U.S. production: 26.4 percent including variety meats
      • Pork: $421 million, -1 percent
      • PVM: $89 million, -12 percent
      • Pork and PVM: $510 million, -3 percent
  • January – June
    • Export value per head: $55.18
    • Exports accounted for percent of U.S. production: 27.3 percent including variety meats
      • Pork: $2.776 billion, +6 percent
      • PVM: $584 million, +1 percent
      • Pork and PVM: $3.360 billion, +5 percent
total pork and pork variety meat exports 2018
Source: U.S. Meat Export Federation

Looking Ahead

As we look to August, it does not appear that exports to China or Mexico will increase any time soon. The Administration announced in late July that it is preparing to apply additional tariffs on Chinese goods worth approximately $200 billion, while no action has been taken to alleviate Mexican tariffs. This, coupled with a larger breeding herd (+3.5 percent YTD) and an increase in hogs slaughtered (+4.0 percent YTD), is going to put further strain on live hog prices across the United States. The challenges with China and Mexico create an even more urgent need to diversify our export market access opportunities.