China’s huge protein gap is no secret, but it won’t last forever as the country works to rebuild its pig herd and become more self-sufficient again. As China’s need for imports decrease over time, where will that leave the U.S.?
To date in 2020, China has purchased around 12% of the U.S. pork supply, helping the U.S. pork industry reach nearly $4.6 billion in exports so far this year.
Dermot Hayes, an economist with Iowa State University, says the timing is right for diversification as China begins to source more pork from U.S. competitors like Canada, Chile and the European Union.
“We’re at a tariff disadvantage there. We’re still paying 25% additional duty. I would expect those countries, as they sell more pork into China, to look to us to backfill orders. I’m pretty optimistic about pork exports to places like Canada and even Mexico because of backfilling,” Hayes says.
Clay Eastwood, director of international marketing at the National Pork Board, says diversification is a key focus of the Pork Checkoff.
“One of the ways we’re exploring new markets is through a continuation of our Insight to Action research,” Eastwood says. “As a follow-up to our Pork 2040: China Market Assessment work we shared in 2019, we’re looking at similar insights in emerging markets in the ASEAN region, also impacted by African swine fever (ASF).”
Recapturing Market Share
Mexico and Japan are two countries the U.S. has been focusing on in recent years. Tariffs put the U.S. at a disadvantage but since those tariffs have been lifted, U.S. pork is recapturing some lost market share.
The National Pork Board is working with the U.S. Meat Export Federation in Mexico utilizing USDA emerging market program funds to create opportunities to diversity the product mix and products being exported into this country.
“Historically, Mexico has very much been a bone-in ham business for us. We send a lot of fresh bone-in hams down to that market for further processing,” Eastwood says. “Through the emerging market program, we’re going to provide some technical assistance and a technical seminar.”
The technical seminar will demonstrate new merchandising opportunities for primal loin items. It will include product samples to encourage trial in both retail and food service channels, making for an excellent opportunity to diversify products into the Mexico market.
Emerging Market Growth
Markets like Vietnam and the Philippines are emerging markets Eastwood and her team are trying to gain greater insight into. Relationship building is key to developing emerging markets, Eastwood says. But it’s also critical to strengthen and continually develop those relationships in established markets such as Japan and Mexico.
Emerging markets such as Colombia and Australia, have become increasingly important in the last few years. They’ve been bright spots for U.S. pork in terms of creating new opportunities, especially for products that may not have much utility here domestically, she explains.
“For example, in Colombia, we send a good deal of rib tips down there – the portion that comes off the sparerib when you clean it up and make it into a St. Louis style sparerib,” Eastwood says. “This is an example of an opportunity in an emerging market where we’ve created value for a product otherwise less valuable here domestically.”
Farm Journal’s Pork | Jennifer Shike | September 16