The US is the top exporter of pork in the world. In 2012, US pork exports reached a new record of 6.3 billion dollars, up 3.5% from 2011. However, exports in the first four months of 2013 were down 10% from the same period in 2012. The largest export markets for US pork are Mexico, Japan, Canada, and China/Hong Kong, but exports to many countries declined in early 2013 compared to the previous year. Trans-Pacific Partnership negotiations aim to further open markets and remove trade barriers. Animal welfare standards in the EU and potential changes in Canada could significantly impact the global pork trade and production costs. Many food retailers have committed to phasing out gestation stalls by certain

1. Export Update/
Sow Housing
Dallas Hockman
Vice President
NPPC

2. US Share of World Exports
Source: USDA FAS
• US is top exporter of pork in
the world
• EU is 2nd

3. 2012 Year-end Pork Exports – A New
Record
• 6.3 Billion
–↑3.5%
• 4.987 Billion lbs
–↑ slightly
Source: USDA statistics compiled by USMEF

4. Country/Region 2011 2012 % Change 2011 2012 % Change
Japan 493,343.2 455,779.0 -8% 1,962,745 1,986,532 1%
Mexico 537,490.5 600,950.5 12% 1,042,229 1,126,830 8%
Canada 204,647.4 235,603.8 15% 736,498 855,715 16%
China/Hong Kong 483,009.7 431,144.7 -11% 909,468 886,178 -3%
Russia 69,327.7 93,379.9 35% 217,009 268,250 24%
South Korea 188,248.1 150,448.5 -20% 497,009 421,075 -15%
Australia 64,422.8 67,780.5 5% 204,896 209,232 2%
ASEAN 53,599.2 50,068.0 -7% 129,484 121,896 -6%
Central and South America 72,131.1 91,217.9 26% 187,004 228,920 22%
Caribbean 34,072.7 34,952.8 3% 85,324 87,166 2%
European Union 8,227.5 7,534.3 -8% 32,030 24,654 -23%
Taiwan 26,981.4 18,128.1 -33% 53,845 41,164 -24%
Other 18,162.9 25,202.3 39% 50,265 65,147 30%
World Total 2,253,664.2 2,262,125.1 0% 6,107,806 6,322,289 4%
January-December January-December
U.S. Pork and Pork Variety Meat Exports
Volume Value
(Metric Tons) (US $1,000)

5. January-April 2013 Exports
• $1.96 billion
– ↓10% from Jan-April 2012
• 1.548 billion pounds
(702.3 million metric tons)
– ↓10% from Jan-April 2012
– ↑6.8% from March
Source: USDA statistics compiled by USMEF 2013

6. Top US Pork Export Markets: Jan-April 13
Mexico
419.9 M lbs, ↓8%
Japan
315.8 M lbs, ↓12%
China/HK
298.3 M lbs, ↓13%
Canada
164.9 M lbs, ↑4%
South Korea
96.2 M lbs, ↓35%
Japan
$637.1 M, ↓9%
Mexico
$345.7 M, ↓8%
China/HK
$287.7 M, ↓8%
Canada
$265 M, ↑3%
South Korea
$119.1 M, ↓38%
Volume Value
Source: USDA statistics compiled by USMEF, compared to Jan-April
2012

7. Country/Region 2012 2013 % Change 2012 2013 % Change
Japan 161,933.3 143,263.9 -12% 699,931 637,064 -9%
Mexico 207,095.3 190,464.8 -8% 377,366 345,722 -8%
Canada 71,679.1 74,816.6 4% 257,627 265,001 3%
China/Hong Kong 154,883.4 135,300.3 -13% 312,754 287,032 -8%
Russia 24,824.4 5,768.5 -77% 75,682 17,907 -76%
South Korea 66,414.7 43,612.2 -34% 192,651 119,140 -38%
Australia 24,889.3 21,647.9 -13% 77,285 69,838 -10%
ASEAN 14,696.6 20,779.8 41% 38,732 50,975 32%
Central and South America 27,076.8 33,462.3 24% 69,929 83,779 20%
Caribbean 11,700.8 12,237.4 5% 29,425 29,943 2%
European Union 2,508.6 2,180.2 -13% 7,969 10,321 30%
Taiwan 6,998.4 7,137.1 2% 15,510 16,040 3%
Other 6,972.5 11,599.8 66% 17,926 30,167 68%
World Total 781,673.2 702,270.8 -10% 2,172,787 1,962,929 -10%
January-April January-April
U.S. Pork and Pork Variety Meat Exports
Volume Value
(Metric Tons) (US $1,000)

8. Monthly Pork Exports
Source: USDA statistics compiled by USMEF 2013
Metric Tons

9. Exports Share of Pork Produced in US
Source: USDA *includes sausage casings
25%

10. Exported Product Value to Producers
• Export value equal to $52.72 per head year-to-date,
down from $58.84 for Jan-April 2012
• Example:
• Domestic ham value is $0.60/pound
• Export ham value: $0.75/pound
• $0.15 x about 46 pounds per head = $7 per head premium
• 40%+ of all U.S. hams exported

11. • For every $1 million dollars of muscle meats
exported, live value increases by $0.05/CWT
• For every $1 million dollars of variety meats
exported, live value increases by $0.20/CWT
Variety
Meat
Product
Domestic
Price/lb.
Exported
Price/lb.
Bungs $0.10 $1.50
Ears $1 $2.25
Front Feet $0.40 $1
Hind Feet $0.20 $0.70
Stomach $0.80 $1.30
Tongues $0.60 $1.35
Exported Product Value to Producers

12. 0
150,000
300,000
450,000
600,000
750,000
900,000
1,050,000
1,200,000
1,350,000
1,500,000
1,650,000
1,800,000
1,950,000
2,100,000
2,250,000
MetricTons
Year
U.S. Pork Exports
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

13. • 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
• The most important FTA the U.S. has ever negotiated
thus far
• Goal: Removal of all tariff and non-tariff barriers
• Major payout is resolving sanitary and phytosanitary
(SPS) barriers
• Goal - to reach an agreement by fall 2013, but that will
be difficult as many issues still remain outstanding
Trans-Pacific Partnership (TPP)

14. Transatlantic Trade &
Investment Partnership (TTIP)
• Significant undertaking
• Free trade negotiations between the U.S. & 27-
member European Union
• Negotiations will begin July 2013
• NPPC leading lobbying effort and building
coalition of other ag groups
• Agreement must be comprehensive, include
sensitive issues such as agriculture

15. Transatlantic Trade &
Investment Partnership (TTIP)
• Current major barriers to U.S. 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
• EU wants to include other unjustified barriers as
requirements for market access for U.S. pork & ag
products:
– Animal welfare standards
– Geographical indicators

16. The Economic
Impact of Animal
Welfare Rules

17. Export Market Evolution
1. Gaining Access to Market
2. Building Market Share
3. Keeping Market Open

18. Animal welfare rules in the
European Union (EU)
• The EU published a set of directives in
November 1991 (updated in 2008) “laying down
minimum standards for the protection of pigs”
that went into effect on January 1, 2013.
• The directives require that sows be housed in
groups (as opposed to stalls, or individual
maternity pens) from four weeks after breeding
until one week prior to birthing

19. EU’s Progress on Sow Housing
Mandated to be in place 1-1-13
Million % Compl
Spain 2.5 70%
Germany 2.2 48%
Denmark 1.28 85%
Poland 1.28 80%
France 1.2 33%
Netherlands 1.02 63%
Italy .756 69%
Belgium .543 45%
UK .487 100%
Romania .376 90%
Top 10 11.64
83% of EU Sows
EU 27 = 13.95 Mil Sows

20. EU Sow Stall Ban
• 80 percent of countries still do not comply with new legislation
• EU Commission sent warning letters in February to Belgium, Denmark,
France, Germany, Ireland, and Poland
• Countries not in compliance given four months, if remain noncompliant,
Commission refers issue to the European Court of Justice
• Estimated 3.25 million sows housed in individual stalls as of Jan. 15, 2013
• Conversion costs centered on $600 per sow
• Ban may reduce EU pork production by 5-10%
– 5% = 1.14 million metric tons
• EU Commission projects EU exports expected to decline by 9% from
2011 to 2022

21. EU Sow Stall Ban
• Production
– EU pork production will decline by 8.9 million MT between 2011 and
2020
– The decline in production will result in a loss of value added of $30
billion from 2011-2020
• Exports
– High pork production costs in the EU will cause a reduction of
almost 1 million MT in EU pork exports
Dr. Dermot Hayes Economic Impact Estimate

22. Canada – Review of Codes
of Practices
• National Farm Animal Care
Council
• Just Released
– 60 Day Comment Period
• Pressure by Retail Council of
Canada

23. Animal Welfare – Code of Practice
NFACC
releases code
CPC economic
analysis
60 day public
comment
period
Comment
period ends
Code Dev.
Comm. reviews
comments
Code Dev.
Comm. may
make changes
New Code
published &
circulated

24. Gestating Sows
• As of July 1, 2024 all sows
must be housed in groups after
breeding (up to 35 days)
• Time in stalls can be extended
to protect the welfare of
individual sows on the advice of
a competent stockperson????

25. Codes of Practice
• http://www.nfacc.ca/codes-of-
practice/pigs

26. ISO Animal Welfare
Global Outreach
• Continue to oppose the development of an ISO
standard on animal welfare, which undermines OIE
• NPPC outreach resulted in a ‘re-start’ of the process –
technical specification instead of full standard
• NPPC successful in strong support for comments to
draft concept that minimizes mischief, support science
• Not endorse 5 Freedoms, overreach and duplication
• NPPC successful in limiting vegan activist groups on
the U.S. delegation for next meeting, June 24th
• This process and issue more important with the TTIP
moving forward
• Prepare for years of engagement

27. Restaurants
On Site /
Hospitality
Retailers Distributor Brands
Arby’s Dunkin’ Donuts Aramark* Costco* Sysco Campbell’s*
Au bon Pain* Einstein Noah* Bon Appétit* Harris Teeter Atlantic Prem.* ConAgra Foods
Baja Fresh Hardee’s/Carl’s* Carnival* Kroger General Mills
Bob Evans* Jack in the Box Compass* Safeway Heinz
Breugger’s* McDonald’s* Dine Equity* Sears/Kmart Hillshire Brands
Burger King* Qdoba Marriott Supervalu Johnsonville*
Cheesecake Fact.* Subway Metz Cul. Mgt.* Target* Oscar Meyer*
Chili’s Sonic* Sodexo* Whole Foods Williams Sausage
Cracker Barrel Tim Hortons Royal Caribbean* Winn Dixie
Denny’s Wendy’s Trusthouse*
Dine Equity* Wienerschnitzel*
*denotes a firm commitment to a date.

28. 201220082003 2013
2013

29. 100% Committed to a Date
2015 2017 2020 2022 2025

30. Unclear/Non-Specific
Commitments
2008: 5% per
year for 3 Years
“plans
by 2017”
“20%
over time”
“formulating
plans”
“encouraging
suppliers”
“It will take time.”
“working with
Suppliers”
“formulating a
plan”
“shifting away”
“within
10 years”
“discussions
complete by 2022”
“working with
Suppliers”
“substantial majority
In 5-7 years”
“determining
a timeline”
“over time”
“solution
by 2022”
“could take
ten years”
“continue
working”
“committed to
suppliers”
“actively collaborating
with suppliers”
“could take up to
ten years”
“could take up to
ten years”
“directing suppliers
by 2018”

31. Two Tiered Pricing
• Costco
• Safeway
• Sysco