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Pork Exports
Pork Imports
Live Hog Trade
Annual trade statistics reported here are finalized each
spring. In addition, Livestock and Meat Trade Data contains monthly and annual data for imports and exports of live cattle, hogs, sheep, and goats, as well as beef and veal, pork, lamb and mutton, chicken meat, turkey meat, and eggs. The tables report physical quantities, not dollar values or unit prices. Data on beef and veal, pork, and lamb and mutton are on a carcass-weight-equivalent basis. Breakdowns by country are included.
During the early 2000s, the United States was the second
largest pork exporter in the world, shipping over 2 billion
pounds (carcass weight equivalent, or cwe) of fresh and
frozen pork cuts to foreign markets. The United States
is a relatively recent entrant to the international pork
market, becoming a net exporter in 1995. Since 2000, net
exports have increased by more than fivefold.
Being a net exporter is one result of significant structural
changes affecting the U.S. pork industry in recent years.
Since the mid-1980s, the industry has moved away from
a structure based on large numbers of small, independently
owned hog operations, with sufficient year-round processing
capacity to accommodate cyclically large fall and winter
slaughters. The industry has gradually adopted production
practices based on fewer, larger operations and a reliance
on contracting and vertical coordination to reduce producer/processor
risk and to optimize year-round slaughter capacity utilization.
The restructured U.S. pork industry produces more pork
with fewer sows. Such production gains derive from productivity
increases, lower costs of realized scale economies, producer
adoption of improved swine genetics, and new, innovative
swine management techniques. Since the early 1990s, these
productivity gains have allowed the industry to export
a higher percentage of U.S. commercial pork production—reaching
almost 10 percent in the early 2000s.
Pork Exports
Primary markets for U.S. pork products are Japan—which
accounts for about half of U.S. exports, Mexico, and Canada.
The primary competitors of the United States in foreign
markets are Canada, Denmark, and Brazil.
During the early 2000s, almost half of U.S. pork exports
to Japan were fresh chilled product while the remainder
was frozen pork cuts. Of Japan's imports of fresh pork
in the early 2000s, the United States was the major supplier,
followed by Canada. For frozen pork, Denmark was Japan's
primary supplier, followed by the United States and Canada.
Imported fresh pork products—higher priced cuts
such as loins—are typically marketed through retail
channels in Japan, while frozen pork cuts—mainly
boneless bellies and shoulders—are used as inputs
for processed pork products.
Mexico was the second most important export market for
the United States during the early 2000s. Mexican demand
for U.S. pork products appears to be sensitive to changes
in income. The following chart shows the decline in U.S.
exports that accompanied the Mexican Peso crisis in 1995,
followed by the slow recovery of the Mexican economy and
demand for U.S. pork products. However, negative growth
of the Mexican economy during the early 2000s brought
about a slowdown in U.S. pork exports, rather than a decline.
From 2003 forward, positive economic growth and Mexican
demand for imported pork accelerated simultaneously.
Canada was the third most important foreign market for
U.S. pork products during the early 2000s. Increased Canadian
demand for U.S. pork cuts in recent years has been accompanied
by significant expansion in the Canadian pork industry.
Increased flows of U.S. pork to Canada, despite higher
Canadian production, are largely attributable to two factors.
First, Canadian traders export Canadian pork cuts into
lucrative foreign markets, thereby "shorting"
the domestic market. Competitively priced U.S. pork cuts
thus flow north to meet Canadian consumer demand. Second,
economic forces are pushing U.S. and Canadian food industries
closer together. A North American pork industry will continue
to develop as prices and policies cause decisionmakers
to increasingly ignore national borders.
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Pork Imports
The United States is a major importer of
pork products, accounting for less than one-fifth of world
pork imports during the early 2000s, behind only Russia
and Japan. The lion's share of U.S. pork imports originates
from Canada and Denmark. In the early 2000s, more than
four-fifths of U.S. imports came from Canada, while Denmark
accounted for about one-tenth. However, Canada's preeminence
as a supplier to the United States is a recent development.
As recently as 1985, Denmark and Canada each supplied
about two-fifths of U.S. pork imports.
What has changed? First, the significant
expansion of the Canadian pork industry in the last decade
has enabled it to supply pork cuts to fill deficit U.S.
markets. Also, a number of factors have combined to lower
overall costs of trading with Canada, relative to Denmark.
The North American Free Trade Agreement (NAFTA), relatively
low transportation costs, and cross-border investments
have together accelerated the rate of integration in the
North American pork and foodservice industries. Nevertheless,
Denmark is likely to be a presence in the U.S. market
for some time, simply because it is a relatively low-cost
supplier of ribs, a cut for which American consumer appetites
seem insatiable.
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Live Hog Trade
The United States is a large net importer
of hogs, with trade moving from north to south. Significant
numbers of live hogs are imported from Canada—most
of which are likely to be feeder animals, while U.S. hogs
are exported sporadically to Mexico.
Exports. From the mid-1980s to the early
2000s, Mexico was the destination of over three-fourth
of U.S. hog exports, while less than one-fourth went to
Asia. During this period, slightly less than two-thirds
of U.S. hog exports were slaughter animals (animals weighing
more than 50 kilograms) and about a third were classified
as breeding animals.
From the mid-1980s to the early 2000s, slaughter hogs
comprised about three-fourths of U.S. hogs exported to
Mexico, and breeding animals accounted for less than one-fourth.
Mexican demand for U.S. hogs tends to be strongest in
the fourth quarter of the year, when U.S. slaughter hog
numbers typically achieve annual highs and live hog prices
all to annual lows.
Imports. Canada is by far the most important
exporter of live hogs to the United States. Since 1989,
Canadian hogs have comprised most of the hogs imported
into the United States. The following chart shows two
important features of Canadian hogs exports. First, the
number of hogs imported annually from Canada has increased
more than fivefold since 1989. Second, the feeder pig
component of those imports has almost quadrupled. Canadian
feeder pigs have clearly evolved into a key component
of the U.S. pork industry.
Many factors have come together in recent years to create
strong incentives for Canadian producers to export feeder
pigs to the United States. Among the most important elements
was the drive by the Canadian Government to curb expenditures
in the 1990s, including abolishing the Crow Rate grain-transport
subsidy in 1995. Eliminating this subsidy had two important
effects. First, it created an incentive to produce hogs
in Western provinces. That is, without the transport subsidies,
grain began to be used locally for livestock production.
Second, lower agricultural subsidies in Canada caused
reductions in existing U.S. countervailing duties on imported
Canadian hogs. These policy changes created powerful incentives
for the Canadian pork industry to expand.
On the U.S. side, factors such as available slaughter
capacity, dependable feed supplies, and environmental
regulation favoring the construction of hog-finishing
facilities in Corn Belt States came together to generate
significant U.S. demand for Canadian feeder pigs. The
trend is likely to continue.
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