February 15, 2005

U.S. pork exports looking up as market access increases

Increased market access for U.S. pork, created by trade agreements, is the driving force behind the fantastic export growth pork producers have experienced for over a decade, according to National Pork Producers Council (NPPC) President Keith Berry.

Since the implementation of the Uruguay Round Agreement, U.S. pork exports have increased 337 percent by volume and 292 percent by value, helping to prop up U.S. live hog prices.

According to the Center for Agriculture and Rural Development (CARD) at Iowa State University, 2003 U.S. pork prices were $23 per head higher than they would have been in the absence of exports. Calculations also show that in 2004, about 12 percent of the pork produced in the U.S. was exported. 2004 U.S. live hog prices would probably have been fallen about 30 percent if the amount of U.S. pork exported had instead been sold in the domestic market.

In addition to the gains generated by the Uruguay Round in markets such as Japan and South Korea, US pork producers in 2004 reaped the benefits from a number of other trade deals in markets such as Mexico (with an increase of more than 90 percent in value terms and more than 65 percent in volume compared to 2003), China (with an overall increase exceeding 265 percent and exceeding 200 percent by volume, as well as an even more remarkable increase of 649 percent by value and 589 percent by volume in variety meats), and Russia (with an increase of over 490 percent by value and 285 percent by volume).

The North American Free Trade Agreement has made it possible for Mexico to become the U.S. number one volume market for pork exports. Also, the China World Trade Organization agreement has helped push U.S. pork in the forefront of the vast Chinese market.

Also, the recent trade deal negotiated with Russia that established U.S.-only quotas for pork also has lifted U.S. pork exports, said Berry. Additionally, U.S. port exporters can expect increased pork sales to Australia as a result of the new market access in that country.

Berry said NPPC continues to work hard to open new markets for U.S. pork exports, where the current focus is on the U.S. Free Trade Agreement with Central American nations Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua. The significant and increasing market potential for U.S. pork producers in this region is the reason for NPPC's push for Congress to pass the Dominican Republic - Central America Free Trade Agreement (DR-CAFTA).

It is estimated that with the passing of the DR-CAFTA, U.S. pork exports to these six countries will increase by an additional 20,000 metric tons of pork annually. Live hog prices will also increase by 36 cents per hog for all of the hogs sold in the U.S. each year.