April 23, 2007

 

US February pork export volume down 6 percent on-year

 

 

US exports of pork and pork variety meats in February dipped nearly 6 percent from the year-ago level, but market analysts see this as only a speed bump on the road to another record-setting year.

 

Mexico accounted for the majority of the decline in pork export volume during February and for the first two months combined.

 

February was one of the rare times in recent years in which US pork exports have not been above the same-period prior-year level. The year 2006 marked the 15th consecutive year in which pork exports set a record.

 

Total pork international sales, including pork-variety meat products, which include organ meats such as heart, kidney and liver, for February were reported at 100,908   tonnes, compared with 106,831 tonnes a year ago.

 

Dax Wedemeyer, analyst with US Commodities in West Des Moines, Iowa, said the year-on-year dip in pork exports in February "is not too much to worry about". It is not uncommon to see some ups and downs in the monthly totals, and "demand continues to stay strong," he said.

 

Ron Plain, agricultural economist at the University of Missouri, said international sales in January were very strong, so "it wasn't much of a surprise" when February sales were off a little. Also, February sales a year ago were large, so this year's figure was going against a big number, he said.

 

The February 2006 total pork exports were slightly above the average of the monthly figures for the year.

 

While the February volume was down from 2006, the value of the sales climbed by US$18.2 million, or nearly 8.3 percent to almost US$239 million.

 

Plain said an upside to the February sales data was a strong showing by Japan, which had an increase of nearly 3,000 tonnes and a boost in value of US$12.8 million from a year ago.

 

Japan is the largest international customer for US pork through the first two months of this year with a 29 percent share of the total.

 

Mexico, which currently ranks second in volume, held the no. 1 spot for tonnage last year but Japan had the top ranking for sales value.

 

Sales of fresh hams to Mexico for the first two months were down 20 percent as was the pork total.

 

Lynn Heinze, vice president of information services with the US Meat Export Federation, said the decline in pork sales volume to Mexico during the first two months of this year and late last year was due to price competition from Mexico's domestic production and supplies.

 

He said domestic prices there for pork cuts used for further processing have been below US prices, so processors in Mexico are pulling more from domestic stocks and working down their inventories.

 

Sales to Mexico have declined from previous-year levels in the past four months, which raised some concerns that it could be establishing a trend.

 

However, analysts predict that sales to Mexico could grow again as the year progresses. The Mexican economy has been expanding so people have more income to purchase meat products.

 

Also, US slaughter and pork production normally undergoes a seasonal expansion during the fall and winter. Prices for most cuts, with the exception of fresh hams, tend to decline during that period, which could make them more attractive to Mexican processors.

 

Bob Brown, private analyst in Edmond, Oklahoma, said everyone is "so used to having big export numbers that when one (month) is down from a year ago, we get cross-eyed."

 

However, he also said that taking the February sales volume and multiplying by 12 would generate an annual figure equal last year's total, and it's "hard to make conclusions" after just two months of data.