Becca Hendricks, Dr. Paul Sundberg, Laurie Hueneke, and Dr. Dermot Hayes - Export Issues & World Markets
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Becca Hendricks, Dr. Paul Sundberg, Laurie Hueneke, and Dr. Dermot Hayes - Export Issues & World Markets

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Export Issues & World Markets - Becca Hendricks, National Pork Board, Dr. Paul Sundberg, National Pork Board, Laurie Hueneke, National Pork Producers Council, Dr. Dermot Hayes, Iowa State University, ...

Export Issues & World Markets - Becca Hendricks, National Pork Board, Dr. Paul Sundberg, National Pork Board, Laurie Hueneke, National Pork Producers Council, Dr. Dermot Hayes, Iowa State University, from the 2013 World Pork Expo, June 5 - 7, 2013, Des Moines, IA, USA.

More presentations at http://www.swinecast.com/2013-world-pork-expo

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Becca Hendricks, Dr. Paul Sundberg, Laurie Hueneke, and Dr. Dermot Hayes - Export Issues & World Markets Becca Hendricks, Dr. Paul Sundberg, Laurie Hueneke, and Dr. Dermot Hayes - Export Issues & World Markets Presentation Transcript

  • US Pork Exports Becca Hendricks AVP International Marketing, National Pork Board
  • Exports Share of Production • 23.4% of U.S. Pork (muscle cuts only) • 27% of U.S. Pork and Pork Variety Meats Source: USDA *includes sausage casings
  • CI #2: Enhanced DemandCI #2: Enhanced Demand 0 150,000 450,000 750,000 1,050,000 1,350,000 1,650,000 1,950,000 2,250,000 Metric Tons Canada FTA NAFTA (Mexico) WTO Uruguay Round (Japan & South Korea) U.S.-Taiwan Pork Deal China WTO Accession Russia Pork TRQs Australia FTA DR -CAFTA U.S. - Korea U.S. -Colombia U.S. - Panama Importance of Free Trade
  • 2012 Year-end Pork Exports – A New Record • $6.3 Billion – ↑3.5% • 4.987 Billion lbs – Up slightly Source: USDA statistics compiled by USMEF
  • 1st Quarter 2013 Exports • $1.488 Billion – ↓11% from Q1 2012 • 1.164 Billion pounds – ↓12% from Q1 2012 • $55/head in value Source: USDA statistics compiled by USMEF 2013
  • Partners in International Trade • National Pork Board • National Pork Producers Council • US Meat Export Federation • State Pork Associations
  • Serving Trade Partners • Consistent, high-quality, nutrient-dense meats • Unparalleled food safety history • Reliable, versatile supply • Market development & education support • Transparent, responsible production methods • Producer/packer/government commitment & collaboration
  • Trade Access Laurie Hueneke Director of International Trade Policy, National Pork Producers Council
  • US Pork Industry Trade Policy • National Pork Producers Council = advocacy arm of the US pork industry which sets domestic and international policy • Use science-based trade & impact to producers bottom line/economics to guide policy setting decision-making – Work with subject-matter experts, other industry groups • Many countries erect artificial or unscientific barriers to trade called non-tariff trade barriers or ‘sanitary and phytosanitary’ (SPS) barriers – Examples: PRRS restrictions, trichinae mitigation – Violates rules agreed upon as part of the global trade agreement
  • • Asia-Pacific region free trade agreement (FTA) negotiation • 11 countries—Australia, Brunei, Canada, Chile, Mexico, New Zealand, Peru, Singapore, USA, Vietnam • Japan’s (almost official) joining TPP is a game changer • Most important FTA the US has ever negotiated thus far • Goal: Removal of all tariff and non-tariff barriers • Major payout is resolving sanitary and phytosanitary (SPS) barriers • Aim to reach an agreement by fall 2013, but that will be difficult as many issues still remain outstanding Trans-Pacific Partnership (TPP)
  • Transatlantic Trade & Investment Partnership (TTIP) • Free trade negotiations between the US & 27-member European Union • Negotiations likely to start summer 2013 • NPPC leading lobbying effort • Major barriers to US pork exports – Tariff rate quota (TRQ) smaller than Uruguay Round minimum access – Ban on ractopamine – Trichinae mitigation requirements – Prohibition on pathogen reduction treatments (PRTs) – Plant approvals
  • • Russia • Implemented complete ban on imports of US pork, beef and turkey Feb. 11 • No science-based reason • In December, Russia announced it would require pork imports from the US to show documentation that the pork does not contain ractopamine residues (Paylean) • NPPC working w/ US government to reopen market for ractopamine-free product • China • Issued a statement asking for third party verification that US pork exports contain no ractopamine residues • Already had ban on ractopamine • Lots of volatility and uncertainty Russia & China
  • Trichinae Countries with Trichinae Restrictions: • Albania • Argentina (unofficial) • Barbados • Belarus • Brazil (unofficial) • Chile • Croatia • Colombia (lifted soon) • Dominica • European Union • India • Kazakhstan • Macedonia • Peru • Russia • Serbia (no export certificate) • Singapore • South Africa • Ukraine • Venezuela
  • Impact of Trichinae Restrictions on US Pork Exports Dermot Hayes Iowa State University, Tra de Consultant to NPB and NPPC
  • Overview • Costs associated with trichinae certification for both chilled and frozen pork • Chilled and frozen pork markets, shelf life issues and consumer preferences • How chilled and frozen pork is processed and sold • Economic costs of certification • Country specific data
  • Certifying Frozen Pork • Example: A customer asks to buy frozen picnics that are trichinae certified • The USDA will provide cert if it can make sure that time/temp conditions met, this requires monitoring • A third party will handle freezing and paperwork for $0.06-0.10 per pound • A special label is then used to identify the boxes that contain the certified picnics • This is added to the capital costs associated with the ownership of the meat
  • Testing Fresh or Chilled Pork • Example: A customer asks for chilled picnics with trichinae cert • Plant identifies a group of animals for testing so guaranteed enough picnics • The animals are slaughtered and processed separately from other animals • Sample taken from diaphragm of each of the animals and sent for testing • The lab combines a group of 100 samples and searches for trichinae larvae, if the sample is free then the carcasses are certified • Lab cost is $0.01 per pound of carcass. Paperwork and segregation costs equal $0.02 to $0.04 per pound depending on the facility, (larger facilities have higher costs), industry average is $0.044 per pound • Picnics sent to the customer and the rest of carcass sold to customers that do not require a cert
  • Markets for Chilled and Frozen Pork • In general, importing retail consumers prefer chilled pork and processors prefer frozen pork • Because of limited shelf life, chilled pork can only be sold to countries where shipping time and customs clearance make it feasible • Countries that currently import chilled US pork include Japan, Mexico, Canada, Taiwan and South Korea • In theory, US can export chilled pork to the EU, Russia, China and all of Central and South America
  • Markets Where Frozen Requirement is the Barrier • Kazakhstan, Singapore, South Africa, Ukraine • EU and Canada can provide pork to these markets without additional $0.10 per pound cost • Importers prefer spot purchases from these sources rather than the paperwork and capital costs and time associated with the US system, this further erodes the US costs advantage
  • Singapore Partner Country Unit Quantity % Share % Change 2012/20112010 2011 2012 2010 2011 2012 World T 72,361 65,994 72,055 100.00 100.00 100.00 9.18 Brazil T 26,962 22,565 26,993 37.26 34.19 37.46 19.63 Netherlands T 8,088 8,991 10,932 11.18 13.62 15.17 21.60 Australia T 12,898 11,298 9,147 17.82 17.12 12.69 - 19.04 United States T 8,055 7,461 7,378 11.13 11.31 10.24 - 1.11 France T 3,555 3,771 3,080 4.91 5.71 4.27 - 18.33 Denmark T 2,222 2,091 2,522 3.07 3.17 3.50 20.59 Spain T 396 1,294 2,466 0.55 1.96 3.42 90.65 Canada T 4,551 2,043 2,281 6.29 3.10 3.17 11.65 Germany T 1,199 1,132 1,942 1.66 1.71 2.69 71.57
  • South Africa Partner Country Unit Quantity % Share % Change 2012/20112010 2011 2012 2010 2011 2012 World T 26,105 32,079 32,951 100.00 100.00 100.00 2.72 Germany T 11,083 15,896 13,304 42.45 49.55 40.38 - 16.30 Canada T 5,816 7,831 8,135 22.28 24.41 24.69 3.89 Spain T 1,985 2,677 4,760 7.60 8.35 14.44 77.79 France T 3,013 2,192 1,999 11.54 6.83 6.07 - 8.82 United Kingdom T 50 23 1,268 0.19 0.07 3.85 5413.05 Denmark T 889 278 976 3.41 0.87 2.96 251.77 Belgium T 1,423 1,037 803 5.45 3.23 2.44 - 22.54 Ireland T 1,541 1,063 797 5.90 3.31 2.42 - 24.96 Netherlands T 0 75 312 0.00 0.23 0.95 316.62 Hungary T 99 760 300 0.38 2.37 0.91 - 60.56 United States T 25 80 244 0.10 0.25 0.74 204.58
  • Markets Where Chilled Requirement is the Barrier • Argentina (unofficial), Brazil (unofficial), Chile, Cuba, Colombia (may soon be removed), Dominica, EU, Peru, Russia • Suppose that picnics account for one tenth of the carcass value then the effective barrier is $0.044 per pound multiplied by 10! • Need to request the certificate before the animal is slaughtered also imposes a cost because spot sales are prohibited (the largest US pork exporter to Mexico does not slaughter any animals), elimination of spot sales is worth about $0.10 per pound • Total cost of this system effectively keeps us out of the chilled market in the countries listed above • US has a competitive advantage in many of these countries as is evidenced by market share in frozen product
  • Colombia Partner Country Unit Quantity % Share % Change 2012/2011 2010 2011 2012 2010 2011 2012 World T 8,082 16,354 26,818 100.00 100.00 100.00 63.98 United States T 3,211 7,779 13,611 39.73 47.56 50.75 74.98 Chile T 2,250 3,879 6,765 27.83 23.72 25.22 74.41 Canada T 2,622 4,697 6,417 32.44 28.72 23.93 36.62 China T 0 0 25 0.00 0.00 0.09 0.00
  • Summary • Trichinae certification reduces our market share for frozen pork in all countries • Trichinae testing reduces market share or eliminates US from competition in potential chilled pork markets • This report puts a value on this problem • Solutions: – Elimination of the import requirement based on USDA designation and scientific evidence – Bring US pork industry practices and regulatory infrastructure in line with OIE standards
  • Global Outreach-Trichinae • USDA, NPPC and NPB developed position statement which was used to provide the US/global position • Outreach conducted to Central and South American country pork producer groups, reached out to their veterinary authorities • Results of OIE Code Commission: – Text for combination of audits and surveillance but neither separately – Consistent with an EU perspective • Adopted in May but agreed to remain amendable • OIE agreed to continue to work on a system for national trichinae negligible risk status
  • Next Steps • Harmonizing OIE standards and US commercial industry's status will maintain trichinae standing • Pork organizations will continue to interact with OIE standard setting on behalf of US pork producers – More work to be done to gain negligible risk status – Open new opportunities for chilled U.S. pork – Full benefits won’t be realized for years…laying groundwork
  • Your Role to Ensure Continued Safe Food, Animal Health and Market Access • Trichinae prevention SOPs will also protect herd health! – Work with your veterinarian – Participate in PQA Plus and implement GPPs – Strict biosecurity – Strict rodent control
  • Questions?