US pig meat exports end 2016 on a high

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For 2016 as a whole, US pork exports increased by 5% on the year to exceed 1.6 million tonnes.

The value of these exports was up in line with volume to over $4.2 billion. This growth in shipments was biased towards the latter half of the year, coinciding with the escalation in pig meat production and falling US pig prices as the year progressed. As such, export volume was up 16% for Q4 alone.

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Mexico remained the largest market for US pork, with volumes increasing 6% on 2015 to over 562 thousand tonnes. Reflecting the overall trend, the increase was driven by higher shipments towards the end of the year. Volumes were up 22% in the final quarter, despite the falling value of the peso limiting the competitiveness of US product.

China also proved to be an increasingly successful pork export destination last year. Shipments increased 83%, raising the Chinese share of the US pork trade to 11%. Countering the general trend, this growth was stronger early in the year as there was some slackening in Chinese demand as the year progressed. Nonetheless, with US pork becoming increasingly price-competitive compared to EU product, shipments still grew by 50% year on year in November and December.

Conversely, shipments to the key market of Japan were back 5% on the year during 2016. Despite this, the value of shipments remained steady, as decreasing frozen volumes were counteracted by increasing shipments of more valuable fresh/chilled product. The volume decline was driven by lower shipments in the first half of 2016, likely due to competitively priced frozen EU pork.

In 2017, expanding US pig meat production is expected to drive a further increase in annual export volumes. This was previously discussed in more detail here. Overall, this is a concern for other global pig meat exporters, as there will likely be more competition on the global pig meat market. This could put pressure on world prices. However, with unknowns such as the level of Chinese import demand, currency fluctuations, and the future of trade relations between the US and Mexico, the extent to which this might impact UK producers remains uncertain.

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Bethan Wilkins, Analyst

bethan.wilkins@ahdb.org.uk, 024 7647 8757