3. It’s a Big World
• 96% of the world’s population lives outside of the US
• Pork is the world’s most consumed animal protein
• US and EU compete as largest global exporters
• 26% of U.S. production
• We export a lot of products we don’t typically consume
8. 2013 Year-end Exports
• Sold to over 100 countries
• $6.05 B, ↓4% from 2012
• 4.73 B lbs, ↓5% from 2012
• Challenges:
– High supplies in importing
countries
– Trade access and barriers
– Strong competition
– Strong dollar Source: USDA statistics
9. Top Export Markets: Q1 2014
Mexico ↑22%
Japan ↑11%
China/HK ↑9%
Canada ↓18%
Korea ↑15%
C/S Am ↑36%
ASEAN ↑52%
Oceania ↑11%
Japan ↓1%
Mexico ↑36%
China/HK ↑19%
Canada ↓6%
Korea ↑21%
C/S Am ↑41%
Oceania ↑17%
ASEAN ↑51%
Volume Value
Source: USDA statistics compiled by USMEF, compared to 2013
• Record-high
prices…yet:
– $1.649 B, ↑11%
– 1.286 B lbs, ↑11%
– March ↑29%
• Value=$69.93/head
• 31.5% of
production
11. Industry Partners in Trade
• National Pork Board
• National Pork Producers Council
• US Meat Export Federation
• State Pork Associations
• State Soy and Corn Associations
12. CI #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
Impact of Free Trade Agreements
14. The importance of trade
Recent export data
Trends in key countries
Reasons to be optimistic about export growth
A few slides about China
Ongoing free trade agreements with Japan and
the EU
15. Suppose Iowa closed its borders to all agricultural
trade, think of what life would be like
Now assume 100 year passes, will voters want to
open the borders?
A giant sucking sound as labor intensive jobs in
tropical plants, cotton and fruits leaves the state
The job of the economist is to show that Iowa would
be better off allowing free trade with other states, this
can be an unpopular position
16. OPEN to Trade
USA
Canada
EU
Singapore
Australia/New Zealand
Chile
Colombia
Central America
Closed to Trade
Cuba
North Korea
Argentina
Venezuela
Bolivia
Russia
17. US Pork & Pork Product Exports
Calendar Year: 2011 - 2013
Partner Country Unit
Quantity % Change
2011 2012 2013 2013/2012
World T 2328492 2335981 2228051 - 4.62
Mexico T 579793 639808 669762 4.68
China/Hong Kong T 497119 442979 433253 - 5.57
Japan T 493721 457270 428091 - 6.38
Canada T 205221 236310 227909 - 3.55
Korea South T 190237 154278 102017 - 33.87
Australia T 64963 68272 54135 - 20.71
Philippines T 42458 42125 53804 27.73
Colombia T 11422 19740 34872 76.65
Chile T 13146 17569 25523 45.27
Honduras T 19547 20218 22495 11.27
Dominican Republic T 13950 15743 18850 19.73
Taiwan T 27130 18097 18566 2.59
Singapore T 10370 8777 17391 98.14
Ukraine T 4087 2428 14663 503.79
Panama T 5808 8474 13544 59.83
Guatemala T 10433 13094 10655 - 18.62
New Zealand T 6422 8991 8434 - 6.19
Russia T 70287 94235 5805 - 93.84
Peru T 1423 2284 5517 141.54
19. The US exports 24% to 27% of pork production
Iowa produces about one third of US slaughter
hogs, this equates to $2 billion in pork exports or
$666 for every person in the state
When we lost the Russia and Chinese markets in
March of 2013 the price of hogs fell by almost $20
per animal
20. US Pork & Pork Product Exports
Year To Date: January - March
Partner Country Unit
Quantity % Change
2012 2013 2014 2014/2013
World T 616173 547861 603579 10.17
Mexico T 171966 146066 178746 22.37
Japan T 123083 109006 121068 11.07
China/Hong Kong T 118941 109158 116228 13.47
Canada T 55977 58280 48027 - 17.59
Korea South T 54673 35671 40814 14.42
Australia T 19794 16969 19279 13.61
Colombia T 3404 5396 14411 167.08
Philippines T 8597 13314 11968 - 10.11
Singapore T 1794 1882 10566 461.45
Chile T 5088 5264 5260 - 0.07
Dominican Republic T 3559 3809 4490 17.89
Honduras T 5355 5085 4061 - 20.15
Taiwan T 6374 5617 3906 - 30.45
Guatemala T 3085 1955 2730 39.61
New Zealand T 1978 2586 2249 - 13.04
Peru T 264 618 2013 225.89
Costa Rica T 350 837 1805 115.54
Panama T 1578 3549 1551 - 56.29
Ukraine T 504 2787 1322 - 52.57
Trinidad & Tobago T 1537 989 1260 27.42
El Salvador T 585 561 1180 110.44
21. US pork production could fall by 4%-6% this year due to
PED, this has increased pork prices and will cause US
consumers to buy less pork and more chicken
Japan, Mexico, Korea, Canada, Colombia and several
other countries also have PED, this will increase their
import demand
The EU has a surplus of pork available for export because
Russia has banned imports due to CSF
Many of our export customers buy products that are not
popular in the US and this demand is not price sensitive
Best guess: exports will be 4% to 6% lower than would
otherwise have been the case
22. Mexico: economic prosperity allowing for an
improved diet, pork imports up, domestic pork
production stable
Japan: aging population and domestic supports
mean stagnant imports, we are losing market share to
Mexico and Chile
China/Hong Kong: unbelievable potential, could
allow the US to double pork production, recent sales
of US chilled pork is a huge story
Canada: MCOOL reduced the flow of Canadian pigs
into the US and of US pork into Canada
23. South Korea: imports growing again after FMD
disruption (lessons learned)
Australia: FTA access for corked pork only
successful domestic campaign against imports
New Zealand: recent success may be limited by
FSIS interpretation
Colombia: a text book success story for both
countries
Also for DR, Honduras, Guatemala, Costa Rica
Panama, El Salvador, Peru
37. Aggressive, ambitious negotiations between Australia,
Brunei, Chile, Canada, Japan, Malaysia, Mexico, New
Zealand, Peru, Singapore, the United States, and Vietnam
Bilateral talks between Japan and the US over agriculture
(Abe, Obama)
Japan is also negotiating FTAs with Canada, EU and
Australia
Wall Street Journal reported a 10 year phase-in to a
$0.22/lb import duty on pork with funds to be used to
support Japanese pork producers
Huge decision for US pork industry
38. Suggested as a way to stimulate the economies of
the EU and US
General willingness to reduce duties
EU is intransigent on non-tariff barriers such as
anti-GMO and anti-growth promotants
EU consumers have lost faith in regulatory
science because of past failures
Enormous US export opportunity for processed
pork if the deal goes through