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Agriculture

Sales Overseas Boost US Pork, Helping Defray 2020’s Challenges

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Amy Mayer
/
IPR file
Despite trade and pandemic disruptions, 2020 pork exports are on pace to far exceed last year's.

Pork producers in the Midwest had great hope for 2020, in part because China was still rebuilding its swine herd after a devastating African swine fever outbreak. Still, the Sino-American trade war had barely cooled as the Phase 1 deal was signed early in the year, suggesting over-reliance on China could backfire.

“We’re leaving no stone unturned,” said Ted McKinney, U.S. Department of Agriculture undersecretary for trade and foreign agricultural affairs. “If we can sell an extra container of pork somewhere, that’s an extra container of pork that came from somebody’s farm or ranch and that’s what we want to do.”

McKinney says some trade bailout money went into developing new markets. He sees promise in a pending trade deal with Kenya and says other African and Southeast Asian countries are also on his radar.

He spoke during the “How pork exports can save your bacon” webinar sponsored by Agri-Pulse, an agricultural media service.

“This is a challenging time. It’s a challenging time to be a farmer and I can’t sugar-coat that,” said Jan Archer of Archer Farms in North Carolina. “We are so grateful for our international markets.”

Those markets can add more than $7 per head to the total price a farmer gets for a pig, said Dermot Hayes, an agricultural economist at Iowa State University. That’s because they complement the domestic consumers’ needs.

USMEF pork exports 2019 graphic.png
courtesy
Most of the pork exported from the United States comes from parts of the pig that domestic consumers don't want.

“We like the middle parts of the animal, the loin, tenderloin, the rib and the belly,” Hayes said, “and are not big consumers of picnics or butts or hams.”

He says consumers overseas value those cuts along with the ears, tongues, and offal.

“We need those export markets to eat the pieces that we’re not as interested in and in so doing, they reduce the break-even price of producing the loin, the rib and the belly for the American consumer,” he said.

In other words, the price of bacon here is kept lower by the demand for other parts of the pig in other places.

The pig herd in the U.S. is strong, slightly bigger than this time last year, though a little smaller on August 1 than it was on June 1, according to the most recent USDA Hogs and Pigs report. That’s likely the result of disruptions in the industry in the spring as the pandemic spread. Farmers had been planning for a bigger year and then some had to divert pigs from the market when packing plants temporarily closed, while others may have slowed their breeding plans.

“Our exports this fall will continue to be strong. They were extremely strong last fall and I think we’ll meet that level and end up year-over-year about where we are now, at 70-80 percent increase in exports,” Hayes said. “Remember the headwinds we faced. Think how amazing that is, given what happened this year.”