Source: Susan Kelly, MEATINGPLACE, 10/25/18

U.S. pork exports in August, the latest month for which data is available, climbed almost 5 percent from a year ago as shipments to other trade partners offset a drop in exports to No. 1 buyer Mexico, USDA’s Economic Research Service (ERS) said in its latest Livestock, Dairy and Poultry Outlook report.

Exports are being closely watched as the U.S. pork industry steps up production amid an expansion of capacity. The robust August totals, with U.S. pork shipments reaching 438 million pounds, come even as exports to Mexico were 5 percent lower in the month, ERS said. Mexico remains the largest foreign buyer of U.S pork products despite retaliatory tariffs imposed on U.S. pork in June.
Some products hit harder

The Mexican tariff regime appears to have slowed demand for certain U.S pork products, ERS said. Fresh and frozen ham and shoulder cuts, which typically account for as much as 97 percent of monthly shipments, are running about the same as last year. But U.S exports in the category that includes cooked hams and shoulders are down almost 45 percent in the June-to-August period, ERS said.

“Because Mexico imports small volumes of these more-processed products, they are likely 'price takers’ with minimal power to influence the market price of the products purchased. Even with lower pork prices, the Mexican importer is likely bearing a greater incidence of the tariffs on more processed pork products,” the report said.

Other countries buy more
Helping to make up for the shortfall in exports to Mexico, the United States in August shipped 7 percent more pork to No. 2 buyer Japan, 9 percent more to No. 3 Canada and 30 percent more to No. 4 South Korea, while shipments to No. 5 China declined 35 percent.

ERS said the September Quarterly Hogs and Pigs report indicated higher animal inventories and continued additions to the inventory of breeding animals, both of which point to significant increases in U.S pork production. Hog prices in the fourth quarter of 2018 and in 2019 will reflect larger hog numbers, the agency said.

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