U.S. pork's appeal has foreign buyers bellying up for more

AgExporter, June-July, 1996 by Nancy D. Morrison

But the trade picture took on a new look as markets opened up and the pork industry threw its weight into the changing export arena. Over the next five years, U.S. imports tailed off, while exports went hog wild.

In 1995, the United States recorded a $166-million surplus in pork trade as exports topped imports for the first time in 43 years. Pork shipments reached a new high of 264,000 metric tons (product-weight equivalent), a 49-percent increase over 1994 and more than triple the export volume of 1990.

Today, the United States ranks as one of the largest suppliers of pork to the world market. For 1996, U.S. export volume is expected to exceed that of Taiwan and Canada, while rapidly closing the gap with Denmark, the largest single-country exporter. From all indications, exports this year will easily surpass 1995's record.

Much of the current success is attributed to concessions made by major pork importing countries in the Uruguay Round and in separate bilateral negotiations. The pork sectors in Japan and Korea were opened up to allow for greater import access, while the European Union (EU) agreed to limit the value and volume of pork receiving export refunds.

Other important factors contributing to U.S. export gains include: aggressive industry promotion, the ongoing efforts of USDA export programs, new processing and packaging technologies, large U.S. supplies at competitive prices, the quality and variety of U.S. pork cuts, increasing world pork consumption and reduced production or export availabilities in some key nations.

Russia Emerges as Major Market

Among major markets, none has emerged as suddenly or grown as rapidly as Russia. In 1995, Russia surpassed Canada and Mexico to become the second largest U.S. export destination for pork after Japan.

The transformation began in late 1994 and early 1995 when the United States used the Export Enhancement Program (EEP) to open the door for U.S. pork. Since then, exports to Russia have exploded, reaching 46,786 tons last year, a nine-fold increase over 1994.

Previously, most of the pork exported to Russia (mainly frozen carcasses and trimmings) was used by processors for sausages and other processed meat products. Through the use of EEP funds, the United States introduced Russian consumers to a variety of pork cuts more suitable for family consumption.

Traditionally, pork has been the most expensive red meat in Russia, with prices generally exceeding those in the United States. As a result, Russia's consumers have welcomed the availability of inexpensive cuts of U.S. pork, substantially boosting U.S. exports to this market - a trend that is expected to continue this year.

U.S. Expands Market Share in Japan

Japan accounted for half the volume of U.S. pork exports in 1995 and is considered to have the greatest potential for additional export sales through 2000. In 1995, the United States held a 19-percent market share by volume (second to Taiwan) of this $1.5-billion pork import market.

Product quality and safety, low-cost production and consistency of supply are among the attributes contributing to the growing U.S. share of the Japanese market. The U.S. Meat Export Federation and the National Pork Producers Council project that U.S. exports can capture as much as 50 percent of this market by 2000.

In past years, U.S. shipments consisted mainly of frozen pork, but fresh/chilled exports are rising rapidly. New packaging technology has doubled the average shelf life of vacuum-packed fresh/chilled pork to nearly 50 days without degradation in product safety or quality.

Fresh/chilled pork appeals to consumers because it is more versatile and can be used for anything from processing to home cooking. Because of its quality and flexibility, chilled pork commands a premium of 70 to 75 cents per pound over frozen pork.

The use of this innovative packaging technology is unique to U.S. pork. For example, Denmark, a leading pork exporter to Japan, primarily ships frozen product. By comparison, fresh/chilled product now accounts for 47 percent of U.S. pork export volume to Japan and is the fastest growing export segment.

Longer shelf life is also allowing U.S. chilled pork to compete more effectively with Taiwan, the largest supplier to Japan. Taiwan, of course, has a distinct advantage in its proximity to the Japanese market, but the "freshness" advantage loses some of its edge with the improvements in U.S. packaging technology.

Most Other Top Markets Show Growth

Before 1995, Mexico had ranked as the second largest U.S. pork market and was among the fastest growing major customers. Between 1990 and 1994, U.S. shipments to Mexico rose nearly 250 percent, climbing to 51,000 metric tons - a tonnage record that Russia has yet to beat.

But 1995 was not a good year for U.S. sales to Mexico. U.S. export volume fell by around 60 percent following the dramatic devaluation of the peso, and Mexico dropped to No. 3 in terms of U.S. export tonnage, behind Japan and Russia. (In terms of U.S. pork export value, Mexico slipped to No. 4, behind Japan, Russia and Canada.)