Pork exports were a hot topic at the World Meat Congress for both the challenges ahead in a very uncertain trade environment and growing opportunities as global consumers demand more protein and innovative food products.
The international event, held in Dallas and hosted by the International Meat Secretariat and the U.S. Meat Export Federation (USMEF), attracted more than 700 attendees from 40 countries with a focus on “Trusting on Trade.” But the trade environment took a turn for the worse shortly after the conference started.
On Thursday, President Donald Trump announced that the U.S. is hitting Canada, Mexico and the European Union with steel and aluminum tariffs, putting the fate of the North American Free Trade Agreement into further uncertainty and exposing U.S. farmers and ranchers to retaliation.
The 25 percent tariff on steel and 10 percent tax on aluminum went into effect at midnight Thursday. Mexico has already declared it will retaliate immediately, slapping its own tariffs on U.S. “pork legs and shoulders, sausages and food preparations, apples, grapes, blueberries, various cheeses” and other goods."
The Mexican tariffs on U.S. pork will be especially severe for U.S. producers, who are also suffering after China hit them with a 25 percent tariff to retaliate for the steel and aluminum levies. U.S. pork producers have lost $2.2 billion on an annualized basis due to events leading up to and following China’s 25 percent punitive tariffs in retaliation for U.S. tariffs on aluminum and steel, according to Iowa State University economist Dermot Hayes.
The decision to impose tariffs on steel and aluminum from Mexico and Canada ... "significantly heightens our concern as Mexico is already threatening to retaliate against U.S. pork,” said Jim Heimerl, president of the National Pork Producers Council. Last year, "U.S. pork shipped $1.5 billion of product to Mexico, its largest export market, and $792 million to Canada, its fourth-largest market," he said.
USMEF also expressed concerns, but said it “is hopeful that this impasse will be resolved as soon as possible, with duty-free access for U.S. pork maintained. This is especially important now that key competitors such as the European Union are making market access gains in Mexico and view it as a promising market for their pork products," said USMEF President and CEO Dan Halstrom in a statement.
Despite these challenges, National Pork Board CEO Bill Even (pictured above) told WMC attendees that the industry had several success stories in 2017 and he’s optimistic about continued demand growth. Here are some highlights of his Thursday night speech:
- "2017 was an historic — record-breaking year for U.S. pork — exports accounted for nearly 30 percent of all pork and pork variety meat production. Those same exports delivered producer returns of nearly $54 per head to pork producers."
- "We currently expect pork production in 2018 to be 26.6 billion pounds, almost a billion pounds higher than a year ago. Current estimates are for pork production to increase 0.9 percent in 2020 while per capita consumption is expected to be up just 0.2 percent."
- "We’re rapidly increasing our production capacity to accommodate this surge in production as well, and this fall, for example, weekly hog slaughter will likely approach 2.6 million head. Hog slaughter will approach 128 million head in 2019, 2 percent higher than the 2018 slaughter forecast."
- "While the Pork Checkoff works to increase domestic consumption, as Secretary Perdue said today, free trade is truly the key to U.S. agriculture’s success. And that is very true for pork — as we have a greater dependence on export products than any other livestock commodity. (U.S. Agriculture Secretary Sonny Perdue earlier gave the gathering's keynote adddress.)
Attendees also heard from award-winning author and Forbes contributor Jeff Fromm, an expert on emerging consumer trends, whose speech was sponsored by the Pork Checkoff. Fromm, who has authored several books on reaching young consumers, says that food has moved from a mere menu item to a form of self-expression.
“Today’s young consumers are passionate about food; it is a ‘badge’ product,” Fromm said. “We used to express ourselves through clothing, but now it is food culture driven by the young consumer who can often afford to buy anything they wish,” Fromm said.
“As an industry, food marketers must shift from ‘story-telling’ about a product into ‘story-living,’ or showing how the young consumer can integrate a product into their life,” Fromm added. “For example, today’s Gen Z consumer literally has an empty spice cabinet and they look to food merchandisers to fill that gap through innovative, seasoned product offerings. This delivers to the young consumer something they need and do not already have.”
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