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Bethan Wilkins


AHDB Pork Market Intelligence


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Trade tensions depress US pig prices

Home \ Prices & Stats \ News \ 2018 \ August \ Trade tensions depress US pig prices

US pig prices have declined sharply in the past two months.

On 17 August, the Iowa/Minnesota carcase price was quoted as $0.92/kg, just half the price of two months earlier. Prices this low have not been recorded during August since 2002.

The sharp downturn in pig prices reflects an increasingly challenging US pork export market, at a time when production continues to run above year earlier levels (+3% year-on-year for Jan-Jun). The first additional 25% tariff on pig meat shipments to China was implemented in April, and a 10% tariff on most pork exports to Mexico was introduced in June. At the start of July tariffs on shipments to Mexico increased to 20% (click here to read more), and a further 25% tariff was imposed on exports to China.

For the first six months of 2018, export growth had been positive, increasing 7% on year-earlier levels to 942,500 tonnes. However, even in May and June growth slowed to just 2% and subsequent tariff increases have likely depressed this further. US pork exports to China were over 40% lower year on year across May/June and Mexican shipments also fell slightly during June, compared with year earlier levels.


There is some evidence of stockpiling activity from importers of US product early in Q2, which would have also negatively impacted demand in subsequent months. In April, US pork exports were 22% (+31,200 tonnes) higher year-on-year, with shipments to Mexico up a substantial 45% (+20,300 tonnes) year on year. Chinese shipments also remained robust during this month, growing 6% (+800 tonnes) on 2017 levels.

However, exports to other key destinations have remained strong, and might offer some support to the US pork market in the latter half of the year. Good demand from South Korea has enabled shipments to this destination to increase 40% (+35,500 tonnes) across January to June 2018, with this growth rate rising to almost 50% in Q2 alone. Another smaller, but sharply growing market, is Columbia, where volumes traded have grown over 60% (+16,600 tonnes) for the year to date (over 80% for Q2).

Nonetheless, the outlook for US pig producers seems challenging for the latter half of 2018 at least. While trade tensions can offer opportunities for EU and UK pork on the Chinese and Mexican markets (for those with approval), the prevalence of discounted US pork on other global markets will also be a challenge if UK production is to remain price competitive.


Bethan Wilkins, Analyst, 024 7647 8757