June 5, 2020


US Q1 pork exports to China up 300%



As of Q1, China has purchased large amounts of US pork, at a volume of 280,000 tonnes, showing a 300% growth, Farm Journal's Pork reported.


US pork producers have been looking forward to an uptick in Chinese purchases as COVID-19 continues to cause challenges for the industry. 


"For the first quarter, we are at 280,000 tonnes, which is 300% growth," says Dan Halstrom, president and CEO of the US Meat Export Federation. "The weekly data that we get for the months of April and May will indicate the numbers are still big but they're starting to decline a bit which would make sense with reduced supply."


USDA reported export sales of 132,000 tonnes of soybeans for delivery to China during the 2020-2021 marketing year as well. However, this news occurs as reports swirl about Beijing's order to put a freeze on American farm goods of soybeans and pork.


 "We have seen the same unconfirmed reports and are working to confirm," said the National Pork Producers Council in a statement. "We are sceptical of these reports as China is in serious need of reliable, affordable sources of pork. As you know, China is a key export market for US pork producers. We hope the US and China remain in productive dialogue."


Before President Trump's Friday press conference, some economists and industry experts had concerns about a stifled or broken relationship with China.


"We are kind of concerned right now with what's going on with China," says Steve Meyer, an economist with Kerns & Associates. "All of the rhetoric going on back and forth, we are hearing real troubles in moving carcasses to China right now. We've rolled our export forecast back pretty substantially."


"We've been exporting a lot to China," says Nick Giordano, Vice President and Counsel, Global Government Affairs for the National Pork Producers Council. "Of course, nobody really knows whatthe future holds in terms of US [and] China relations."


Despite the current purchases, Giordano, says exports to the country could be better.


"Importers in China have to pay more for US pork," he explains. "[They] have to pay a duty that's higher on US pork than they do with pork from other nations. [It's actually] 25% higher. That's [still] because of the steel and aluminium tariffs the US has on China."


China is not just purchasing from the US.


 "The No. 1 supplier on pork [for China] is Europe, the European Union as a whole," Halstrom says. "We will see an impact in April and May, and it will be a slow-down in growth. I still think there's growth but not as rapid of a pace."


US pork exports are on a record pace for the first quarter—up 40% on-year, he adds. While China is still big, Japan and Mexico are also major markets. New export numbers will be released Friday.


Meanwhile, US producers are still having trouble getting hogs to market and the price forecast is uncertain.


 "The weighted average is in the high 60s right now," Meyer says. "We think the national net weighted average, which we think is representative with all of the hogs, is probably going to stay in that range."


However, it depends if the foodservice industry can buy pork at the same pace its being processed in the next six to eight weeks.


He believes fourth quarter 2020 will bring stronger prices—as the entire industry searches for tensions to lessen.