US pork exports stall - for now
Despite strong growth in the first half of the year, US pork exports lost some momentum in Q3.
At 372.4 thousand tonnes, volumes shipped were 1% lower than year earlier levels during the quarter. Lower average unit prices meant the value of these exports fell by 2%, to $1.03 billion.
Like the EU, the US has also been affected by the decline in Chinese demand for imported pork this year. Volumes destined for China were back 47% year-on-year during the quarter, declining to just 19.3 thousand tonnes. On top of this, exports to Japan, the US’ second largest pork export market, fell 7% to 83.1 thousand tonnes.
Despite challenges on these core Asian markets, the US has proven more robust in sustaining overall export volumes in recent months than EU. This is at least partly due to the US being less reliant on the Chinese market. However, US pork exports are instead particularly vulnerable to disruption in trade with Mexico, which currently receives nearly 40% of exported US pork. This trade could be under threat in the future, given NAFTA is currently being renegotiated.
This issue aside, looking forward US pork exports are expected to return to growth in 2018. This follows from continual increases in production, which the latest USDA forecasts anticipate could expand 4% both this year and next. As such, export volumes are expected to grow 5% year-on-year in 2018. Some of this expansion will likely be supported by strong demand in Mexico and South America, where the pork will not be in direct competition with the EU. However, shipments to Asia are also anticipated to remain resilient, despite demand falling in China and South Korea. Should this be realised, competition on the global pork marketplace looks set to intensify next year.
Bethan Wilkins, Analyst
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