Pork exports set records, but overproduction killing prices

DES MOINES, Iowa — About the only bright spot on the pork horizon right now are exports.

U.S. pork exports in February reached 346 million pounds, or 156,969 metric tons, a 55 percent jump over export totals from a year ago, according to statistics compiled by the U.S. Meat Export Federation.

The February results helped the U.S. pork industry achieve its fifth consecutive month of record-breaking exports, including variety meats.

For January and February 2008, pork and pork variety meat exports are up 41 percent, totaling 671.6 million pounds, valued at $685 million.

“One in every five pigs, about 20 percent, produced in the U.S. was exported during these two months,” said Tim Bierman, a pork producer from Larrabee, Iowa, and a member of the National Pork Board.

Headed to Far East

On a volume basis, China/Hong Kong was the largest market for U.S. pork and pork variety meats in January and February 2008, with 164.7 million pounds. That is a 287 percent increase over the same time period in 2007.

However, Japan remains No. 1 on a value basis at $210.9 million, or 31 percent of total pork and pork variety meat export value.

Supply still killing prices

“Pork production is running 12 percent over last year, making it impossible to raise prices to cover the ever-increasing costs of production,” said Erin Daley, the federation’s manager of research and analysis.

“Without pork exports, at these production rates the U.S. market would have to absorb the equivalent of an additional 60,000 hogs per day, which would drive prices down significantly.”

Export highlights

Among other highlights from the two-month period for pork plus pork variety meat exports:

• Japan: up 4 percent to 64,927 metric tons.
• Mexico: up 2 percent to 55,384 metric tons, but still trailing the record export volumes of 2006.
• Canada: up 28 percent to 26,955 metric tons. Exports were basically on track with the strong volumes recorded during the final quarter of 2007, reflecting large live hog imports from Canada.
• Russia: continues to be a growth market: 164 percent growth to 26,716 metric tons, including 21,812 metric tons of muscle cuts and 4,904 metric tons of variety meats. February exports at 15,786 metric tons were nearly equal to the monthly record of 35.1 million pounds set in November 2007.
• South Korea: down 2 percent to 24,051 metric tons, but February exports were larger than any monthly volume last year with the exception of December. South Korean import statistics show imports from the United States up 10 percent while imports from the EU are down 16 percent and those from Canada are down 10 percent.