U.S. hog producers may have to “temper” expectations for pork shipments to China this year as the world’s biggest pork consumer ramps up production, said Joel Haggard of the U.S. Meat Export Federation.
“We see, through the remainder of the year, ample pork supplies, unless there’s some kind of anomaly,” Haggard, the federation’s Asia-Pacific vice president, said today on a conference call with reporters. U.S. producers will “have to temper expectations for continued growth in China,” he said. “However, we are in the longer run looking at incredible opportunities as they face sustainability challenges for production.”
Chinese pork prices are falling as supplies are said to be “ramping up,” Haggard said. Even with price declines, it still remains profitable to raise hogs in China, he said. Chinese prices are expected to strengthen in the second half of the year because of demand, he said, without giving a specific forecast.
China, the world’s biggest user of pork, is “always the big wild card” for exports, Philip Seng, the chief executive officer of the Denver-based federation, said today on the call with reporters.
China signaled a commitment to economic expansion for the second time in four days as the government said it “must take policies and measures to expand demand,” according to a statement on its website yesterday.
“China basically wants to be self-sufficient as much as possible,” Seng said. “It’s going to be very hard for their production to keep up with the dynamic growth of that whole population, so we always feel there’s going to be room for exports, and sizable exports, to the China market.”
Beef prices in China are at a record high, and U.S. exporters need to get into that market because there’s “tremendous demand unfulfilled there,” Haggard said.
Last year, the U.S. shipped more than $11.5 billion of beef, pork and lamb, Seng said. This year, the industry is going to be “very challenged” to repeat that performance, he said.
U.S. beef exports may be about 1.2 million metric tons this year, little changed with 2011, and climb about 4 percent in value to $5.6 billion, Seng said. U.S. shipments to Japan may rise 18 percent to 20 percent, and exports to South Korea may gain 4 percent, he said. Exports to Russia may rise 9 percent and exports to the Middle East may increase 3 percent, Seng said.
The federation is “quite optimistic” for beef, he said. There are opportunities for export growth in the Middle East and Russia, he said. Japan restricts U.S. beef imports to cattle 20-months-old or younger as older animals are at a higher risk of having mad cow disease. Japan may ease its age restrictions in the third quarter this year, Seng said.
Seng also praised the U.S. Department of Agriculture and the federation’s staff for their work after the announcement on April 24 of a case of mad cow disease in California, the first case in six years. The USDA’s response in the first 36 hours was “critical” to maintaining and keep export markets open to U.S. beef, he said.
Pork shipments will be similar to last year in volume, which were about 2.3 million tons, and value of $6.1 billion, according to the federation’s data.
South Korea will be “a bit of a challenge on the pork side,” as the Asian country’s herd recovers from last year’s outbreak of the foot-and-mouth disease, and Japan will be “somewhat flat” this year, Seng said. The federation sees opportunities in pork in Mexico and Russia.