U.S. exporters will continue to see “massive demand” for meat overseas, especially from China, the world’s biggest pork consumer, according to Brett Stuart, the co-founder of farm-industry researcher Global AgriTrends.
U.S. pork exports may climb 2.7 percent this year, beef exports may rise 10.8 percent, and broilers will increase 2.4 percent, Stuart said today during a conference call organized by AgStar Financial Services Inc., a livestock industry lender in Mankato, Minnesota. In 2011, U.S. meat and poultry exports rose $3.24 billion from a year earlier to $16 billion, he said.
“The incentive to import pork remains huge” in China, Stuart said. “The bottom line is their fundamental structure is keeping their prices significantly higher than the equivalent U.S. prices here, which tells me they’re going to continue to be significant buyers of all imported pork, and specifically U.S. pork.”
Demand from South Korea also will be strong, Stuart said. While the Asian nation will buy about 16 percent to 19 percent less pork than 2011, the volumes will be as much as 35 percent above the five-year average, Stuart projects. The country’s outbreak of foot-and-mouth disease last year led to a culling of about 30 percent of its hog inventory, and some of those farms won’t come back into production, he said.
Exports helped drive prices to records, and producers shouldn’t be concerned about becoming too dependent on foreign markets, Stuart said. Cattle futures touched $1.29675 a pound on Jan. 25, the highest since the commodity started trading on the Chicago Mercantile Exchange in 1964. That marked the seventh record this month. Hog prices reached $1.0435 a pound on April 1, the highest since at least 1986.
“In one sense, while it may feel like we’re increasing our exposure overseas, what we’re really doing is decreasing our exposure here at home,” Stuart said. “The fact that we have markets overseas to ship to insulates us from a domestic recession a little bit here at home. As we see more and more markets buying, it’s probably less risky as we diversify into as many countries as we can overseas.”