Meat+Poultry - April 2022 - 19

" China's recovery from the African swine
fever has really affected its import patterns, "
Shagam said. " Pork imports were very high in
2020 and then came down again in 2021 and are
declining further, expected to decline further
in 2022. On the other hand, changes in dietary
habits and increased incomes have supported
increases in imports of beef. So, we're seeing,
basically, lower pork imports in 2022 and
stronger beef imports in 2022.
" As that need for imported pork diminishes,
it has not only affected the US, which is
a major supplier of pork to China, but it's
affected all the players, and as those countries
have fallen away from China, they're looking
for alternative sources for their levels of
production as well, and there are a number
of markets that we will be competing with
increased fervor in to maintain our market
share from these sources of imported pork. "
Again, exports of US pork variety meats
and hams are critical to the sector. Borror said
roughly 41 lbs per head was exported last year
at an average of $53.28 per head. Including
variety meats, pork exports were about 32%
of hog value or 28% on a cutout value basis.
Exports lean heavily on end-cuts - such as
the leg or ham - which are high in demand
in Mexico.
" We know Mexico's importance was
heightened again last year, partially to offset
that slow-down to China, " Borror noted, " and
Mexico has the labor advantage. So, without
the labor in these plants, we do not have
the labor to debone hams, and so, that has
elevated prices for boneless specifications and
increased our reliance on being able to export
these bone-in hams, largely in combos, chilled
into Mexico and also into Colombia, Australia,
Canada and Dominican Republic as other
top destinations. "
One value-added example is Japan and
part of the reason the US-Japan free trade
agreement was so important. Ground seasoned
pork, which is produced from picnics has
a tariff of 20% that is phasing to zero. When
the United States was not a part of the
Trans-Pacific Partnership the sector faced
losing hundreds of millions of dollars' worth
of business.
" Our American consumers really love
the middle cuts, bacon, ribs, porkchops, and
exports are less significant on these middle
items, so we're able to provide American
consumers affordable middle cuts that are
preferred and capture the value on these endcuts, "
Borror said.
In markets for pork variety meats like
China, variety meats often sell at a premium to
muscle cuts. Stomach and some head products
for example, sell for more than $2 a lb in China.
" So, there is huge demand for these variety
meats, " she added.
" China's
LOGISTICS, COST NIGHTMARES
Australia is a market that has been hard-hit by
astronomical shipping fees. Citing data from
the Office of the Chief Economist, shipping
rates from the West Coast of the United States
into Australia had jumped exponentially.
" We typically ship a boneless ham into
Australia for their processing industry, and
between our higher costs because of labor
shortages and then these astronomical
shipping rates, that is a market where our
exports were down quite notably and an
example of some of the shipping challenges
actually impacting a specific market, "
Borror said.
Borror noted that Asian exporters are
paying premium shipping rates, sometimes 10
times what the rate is for shipping products
from the states back to Asia. She said this
shipping rate disparity incentivized returning
empty containers to Asia. The cost to US
exporters has been a lack of containers and
chassis due to congested terminals. This has
resulted in shipment delays which is a threat to
the United States' exports of chilled meats.
" In my mind is the chilled business at
risk here, " Borror said. " So, chilled pork is a
big part of the US export portfolio and our
competitive advantage. We had $3.37 billion in
waterborne chilled beef exports last year for
an increase of about a billion dollars over 2020,
and the important thing to note is the premium
on a per-pound basis over frozen.
" So, we want to be in this chilled business, "
she said. " When we sell Choice and Prime
product into retail, it needs to be chilled. This
is how these markets have been developed. We
want them to be day in and day out customers,
and we want to capture these big premiums of,
for example, $2.54 a lb in Taiwan. When there's
uncertainty added in and it's no longer a just-intime
business, it becomes really problematic. "
www.meatpoultry.com | 04.22 | MEAT+POULTRY
19
recovery from
the African
swine fever
has really
affected
its import
patterns. "
- SHAYLE SHAGAM
http://www.meatpoultry.com
Meat+Poultry - April 2022

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