Tag Archives: Pork

Over time, animal activists and environmentalists have made calls to put a tax on meat. What effect would that have? To find out, we estimated the impacts that a retail-level greenhouse gas (GHG) tax on meat would have on livestock and grain markets.

The research used a multimarket economic model that integrates the beef, pork, and poultry markets with the corn, distillers’ grain, soybean, soymeal, and ethanol markets. For GHG taxes, we used those provided by Springman et al. based on an emission price (social cost) of $52 per metric ton of carbon dioxide equivalent estimated by EPA. Emissions by meat type include land use, feed production, livestock production, processing, and transport.

Using emission intensities of 26.83 pounds of carbon dioxide equivalent emitted per pound of beef produced, 5.75 pounds for pork, and 5.33 pounds for poultry, the carbon dioxide equivalent taxes as percentages of 10-year USDA retail price averages (2007-2016)  are 13.19%, 3.98%, and 7.52%, respectively. The percent tax for poultry is higher than that of pork because poultry is cheaper per pound, so the tax makes up a greater percentage of the price.

Implementation of the tax, using the same 10-year price averages as baselines, results in an increase in the price of beef by 6.95% and a decline in beef consumption by 3.31%. For pork, the price rises by 3.67% and consumption declines by 0.42%. For poultry, the price increases by 6.12% and consumption declines by 0.38%.

This implies that beef consumption would be more heavily impacted by a GHG tax than pork or poultry. The price of slaughter cattle at the feedlot level declines by 1.48%.

In general, grain markets are minimally affected, with the price of corn decreasing by 0.14% and corn usage decreasing by 0.04%, for example.

Taxing beef, pork, and poultry at retail is estimated to reduce U.S. GHG emissions by 11 million metric tons of carbon dioxide equivalent per year. This would reduce total U.S. emissions by 0.17%, which is commensurate to taking 2.3 million cars off the road each year. This is approximately equivalent to 7% of cars registered in 2018.

The research was funded by a competitive grant from the Undergraduate Creative Activities and Research Experience (UCARE) at the University of Nebraska-Lincoln.

The National Pork Board has named Norman Bessac as its new Vice President of International Marketing. Bessac is currently director of international sales for Tyson Fresh Meats, a position he has held since 2016.

Bessac has spent his entire career in international sales and marketing, business development, customer communications and consumer insights roles in the fresh meat industry. Prior to Tyson, Bessac served as the vice president of international pork sales and marketing at Cargill Meat Solutions in Wichita, Kansas.

“The marketing and promotion of U.S. pork has never been more critical for America’s pork producers,” said Bill Luckey, chair of the Pork Checkoff’s International Marketing committee and a pig farmer from Columbus, Nebraska. “Given today’s challenging international marketing environment, Norman’s extensive knowledge of the pork industry and his deep experience in international markets and consumer preferences will continue our work to elevate pork sales on the global level.”

U.S. pork exports are challenged by the ongoing renegotiation of trade agreements, especially for top markets like Japan, Mexico, Canada and China. While the volume of exports has remained strong in the past year, the value of pork exports was relatively steady, declining by 1 percent, according to the U.S. Meat Export Federation (USMEF). Pork exports represent approximately 26 percent of all U.S. production.

The National Pork Board works closely with USMEF and the National Pork Producers Council (NPPC) in researching and developing new markets and expanding the existing customer base for U.S. pork. In 2018, top global markets for U.S. pork exports include Mexico, Japan, China, South Korea, Canada and Colombia.

“As the pork industry’s continued success depends heavily on access to export markets, it is important to collaborate with experts that can identify new markets while meeting the marketing needs of established markets,” said Bill Even, National Pork Board chief executive officer. “That means continuing to work closely with USMEF, the USDA Foreign Agricultural Service and NPPC. We welcome Norman to the Pork Checkoff in this very important role.”

Over the years, Bessac has held many strategic leadership roles in the food industry with top household name brands including Tyson, Cargill and Sara Lee. Bessac will join the Pork Board staff on April 1.

“I’m honored to join the Pork Checkoff in this critical role. I have decades of experience and knowledge of the fresh meat industry, specifically from the perspective of global food production, processing, sales and marketing,” Bessac said. “I know the players well and look forward to continuing to work closely with them as I shift my focus in a new, aggressive direction on behalf of America’s pork producers.”

Bessac has a Master of Business Administration degree from Vanderbilt University’s Owen School of Business (Nashville) and a Bachelor of Science in Marketing/Management from the University of South Carolina (Columbia).

At the annual business meeting of the National Pork Producers Council – the National Pork Industry Forum held March 7-8 in Orlando, Fla. – NPPC delegates adopted several important resolutions, including those that call on NPPC to:

  • Strengthen pork industry efforts to prevent foreign animal diseases (FADs) from entering the United States. Separate resolutions were adopted, directing NPPC to: work with the U.S. Department of Agriculture and the Food and Drug Administration on restricting imports of soy-based animal feed products from countries with a high risk of transmitting FADs; urge USDA and other public and private research institutions to evaluate FAD virus viability in pig feed and feedstuffs and to develop hold times for imported feed; and work with the National Pork Board, USDA, FDA and the U.S. Department of Homeland Security on coordinating with Canada and Mexico development of practices to protect the North American swine herd from FADs. A related resolution calls for exploring options for mitigating the impact of diseases on the pork industry and to review disease monitoring and control efforts.
  • Work for a change to the U.S. Department of Transportation’s Hours of Service (HOS) rules that allows livestock haulers to not have counted against their “on-duty” time periods when animals are being loaded and unloaded, when they must remain in their trucks. The HOS regulation limits certain commercial truckers to 14 consecutive hours of on-duty times; drivers reaching that limit then must take a 10-hour rest break. For biosecurity reasons, many livestock haulers must remain in their trucks during loading and unloading of animals.
  • Urge the U.S. Department of Labor and Department of Homeland Security to expand visas to allow foreign workers to stay in the United State longer so farm operations have a more reliable work force. U.S. agriculture currently is facing a severe labor shortage.
  • Monitor USDA and FDA to ensure the agencies are transparent throughout the development, production and harvest of laboratory-produced cultured protein (L-PCP). The agencies recently agreed to joint oversight of L-PCP, with FDA overseeing cell collection, cell banks and cell growth and differentiation and USDA overseeing the production and labeling of food products derived from the cells of livestock and poultry.
  • Identify existing and emerging pork industry issues and the funding needs to address them. Recommendations, including budget requirements, are to be provided to state associations prior to the 2020 Pork Forum.
“These resolutions reflect the concerns of the U.S. pork industry and the efforts we need to take to protect the livelihoods of producers,” said NPPC President David Herring. “NPPC will work with Congress, the Trump administration and others to tackle these and other issues of importance to our industry.”

Last year U.S. beef exports shattered the previous value record and achieved a new high for volume, according to year-end 2018 statistics released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Pork export volume came up just short of the record set in 2017 while value slipped 1 percent year-over-year. U.S. lamb exports rebounded from a down year in 2017, largely due to stronger variety meat demand in Mexico.

Fueled by tremendous demand in South Korea, Japan, Taiwan and the ASEAN region, U.S. beef exports reached 1.35 million metric tons (mt), up 7 percent from 2017 and exceeding the 2011 record by 5 percent. Export value soared to $8.33 billion, breaking the 2017 record by $1.06 billion – an increase of 15 percent. For December only, beef export volume was down slightly from a year ago to 112,777 mt, but value still increased 4 percent to $700.2 million.

Beef export value was also record-shattering on a per-head basis, averaging $323.14 per head of fed slaughter in 2018. This was a 13 percent increase over 2017 and exceeded the 2014 record by 8 percent. Beef exports accounted for 13.5 percent of total beef production in 2018 and 11.1 percent for muscle cuts, up from 12.9 percent and 10.4 percent, respectively, in 2017.

Despite significant headwinds, 2018 pork exports reached 2.44 million mt – just 0.5 percent below the 2017 record. Pork export value was $6.39 billion, down 1 percent year-over-year and the third-highest total on record, trailing only 2014 ($6.65 billion) and 2017 ($6.49 billion). For December only, pork exports were down 5 percent from a year ago to 209,780 mt, valued at $527.4 million (down 11 percent).

Pork export value averaged $51.37 per head slaughtered in 2018, down 4 percent year-over-year. Exports accounted for 25.7 percent of total pork production, down about one percentage point from 2017. The ratio was 22.5 percent when including only pork muscle cuts – up from 22.3 percent in 2017.

Korea accounts for half of the $1 billion surge in beef exports

While demand for U.S. beef showed remarkable strength throughout the world in 2018, no market exemplified this momentum more than South Korea. Exports to Korea increased 30 percent year-over-year in volume to 239,676 mt and jumped 43 percent in value to $1.75 billion – an increase of $526 million over the 2017 record and more than double the value total posted just three years ago. Chilled beef exports to Korea increased 19 percent to 53,823 mt and climbed 29 percent in value to a record $525 million, illustrating U.S. beef’s surging success in the Korean retail and foodservice sectors. U.S. beef accounted for 58 percent of Korea’s chilled beef imports in 2018.

“There may have been no greater ag trade success story in 2018 than U.S. beef exports to Korea,” said Dan Halstrom, USMEF president and CEO. “Less than a decade removed from street protests opposing the reopening of this market, Koreans now consume more U.S. beef per capita than any international destination. This is a testament to the U.S. beef industry’s strong commitment to the Korean market and the outstanding support received from the U.S. government – through both USDA promotional funding and the negotiation of the Korea-U.S. Free Trade Agreement (KORUS), which has dramatically lowered import duties on U.S. beef.”

Since KORUS was implemented in 2012, the import duty rate on U.S. beef has declined from 40 to 18.7 percent and will fall to zero by 2026. U.S. beef’s main competitors also have free trade agreements with Korea but currently face higher duty rates than the U.S., including Australia (24 percent), Canada (26.6 percent) and New Zealand (26.6 percent).

Other 2018 highlights for U.S. beef exports include:

  • Exports to leading market Japan increased 7 percent from a year ago in volume (330,217 mt) and 10 percent in value ($2.08 billion, topping $2 billion for the first time in the post-BSE era). The United States is Japan’s largest beef supplier by value and a close second to Australia in volume, but this position is tenuous due to a widening tariff rate gap between U.S. beef and its main competitors, all of which secured tariff rate relief under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
  • Taiwan’s demand for U.S. beef continued to surge in 2018, with exports increasing 33 percent in volume (59,694 mt) and 34 percent in value ($550 million) from the previous records set in 2017. Export value to Taiwan has doubled over the past five years, setting six consecutive records, and U.S. beef holds more than 75 percent of Taiwan’s chilled beef market – the largest share of any Asian destination.
  • While total beef exports to Mexico increased only slightly year-over-year in volume to 239,110 mt, beef muscle cuts achieved strong growth – climbing 7 percent to 142,514 mt. Total export value was up 8 percent to $1.06 billion, exceeding $1 billion for the first time since 2015. Muscle cut value increased 11 percent to $828.8 million.
  • Beef exports to China/Hong Kong softened in November and December and finished the year 3 percent lower in volume at 130,129 mt. However, export value still climbed 12 percent to $1.03 billion (marking the first time since 2014 that U.S. beef exports topped $1 billion in four separate markets). This included exports to China of 7,297 mt valued at $60.8 million. China reopened to U.S. beef in June 2017 after a 13-year absence, but U.S. beef has been heavily disadvantaged by the 25 percent retaliatory duty imposed by China last year, bringing the total tariff rate on U.S. beef to 37 percent. By comparison, Australian beef pays just 6 percent and New Zealand beef is duty-free, benefiting from free trade agreements with China.
  • Led by outstanding growth in the Philippines and Vietnam and larger shipments to Indonesia, beef exports to the ASEAN region increased 20 percent from a year ago in volume (49,226 mt) and 30 percent in value ($274.6 million).
  • Strong growth in Colombia kept beef exports to South America steady with the previous year’s volume at 28,333 mt, while value set a new record at $126.2 million (up 10 percent). Exports were also higher year-over-year to Peru but declined to Chile as Brazil and Argentina’s exports to Chile surged, benefiting from weaker currencies.
  • A strong performance in mainstay market Guatemala and significant growth in Costa Rica and Panama pushed beef exports to Central America to record highs in volume (14,739 mt, up 14 percent) and value ($80 million, up 11 percent).

Solid year for U.S. pork, but second-half exports pressured by retaliatory duties

Through May 2018, pork exports to leading volume market Mexico appeared to be headed for a seventh consecutive record, topping the 2017 pace by 6 percent. But May was the last month in which exports to Mexico would increase year-over-year, due to retaliatory duties imposed in response to U.S. tariffs on steel and aluminum imports. Export volume to Mexico held up relatively well, finishing the year at 777,143 mt – 3 percent below the 2017 record. But export value took a bigger hit, declining 13 percent to $1.31 billion – the lowest since 2015. The decline in value from June through December was 24 percent, totaling $218 million, underscoring the large degree to which U.S. producers and exporters bore the cost of Mexico’s 20 percent retaliatory duty.

“The U.S. pork industry understands the vital importance of the Mexican market, and with strong industry support USMEF has intensified its efforts to retain as much of this business as possible,” Halstrom said. “This includes enhanced outreach in every sector, from large processors, to regional supermarkets, to specialty retailers and restaurant chains. While these efforts have been successful, the decline in export value clearly shows the negative impact these retaliatory duties have imposed on the U.S. pork supply chain.”

Retaliatory duties also impacted pork exports to China/Hong Kong, which fell 29 percent in volume (351,774 mt) and 21 percent in value ($851.7 million) compared to 2017. This included a 30 percent decline in pork variety meat volume to 225,414 (China/Hong Kong is the largest destination for U.S. pork variety meat). The corresponding dramatic decreases in values for feet and picnic hocks, combined with lower ham and picnic values, mean that retaliatory tariffs in China and Mexico resulted in lost value of $11.75 per head (or $860 million) from June through December 2018.

On the positive side, U.S. pork exports to Korea were record-shattering in 2018, soaring 40 percent year-over-year in volume (242,372 mt) and 41 percent in value ($670.3 million). Export value topped the previous record, set in 2011, by 35 percent as U.S. pork capitalized on Koreans’ surging pork consumption. Most U.S. pork now enters Korea duty-free under KORUS, making pork products more affordable and accessible and a perfect fit for Korean’s convenience-driven demand. Korea’s imports of U.S. pork variety meat jumped by 62 percent in volume (15,525 mt) and 68 percent in value ($45.9 million) as items such as bungs and feet made impressive gains.

Other 2018 highlights for U.S. pork include:

  • Exports to leading value market Japan were steady with 2017 in both volume (394,300 mt) and value ($1.62 billion). But similar to beef, U.S. pork’s position as Japan’s leading pork supplier is threatened by implementation of CPTPP and the Japan-EU Economic Partnership Agreement. The United States is now the only major pork supplier that has not gained tariff relief in Japan, with the most immediate impact expected in Japan’s imports of ground seasoned pork and processed pork products.
  • Fueled by remarkable growth in Colombia and solid increases in Chile and Peru, pork exports to South America reached new heights in 2018, increasing 30 percent in volume (135,298 mt) and 23 percent in value ($328.8 million). While most U.S. pork entering South America is for further processing, the U.S. industry is increasingly making inroads into the region’s rapidly growing retail and foodservice sectors.
  • Pork exports to Central America were also record-large, increasing 16 percent in volume to 86,031 mt and 12 percent in value to $201.7 million. Exports increased to mainstay markets Honduras and Guatemala, but much of the region’s growth was achieved in Panama, El Salvador, Costa Rica and Nicaragua.
  • Australia is one of the top destinations for U.S. hams (outside of Mexico and China/Hong Kong), and strong demand for hams pushed pork exports to Australia up 13 percent from a year ago in volume (80,431 mt) and 9 percent in value ($227.3 million). The U.S. also gained significant market share, climbing from 40 to 46 percent of Australia’s pork imports. Exports to New Zealand also trended higher, climbing 10 percent in volume (7,897 mt) and 12 percent in value ($25.6 million).
  • Impressive growth in the Philippines and Vietnam pushed pork exports to the ASEAN region 43 percent higher in volume (68,326 mt) and 31 percent higher in value ($168.5 million). In a down year for U.S. pork variety meat, exports to the ASEAN were a notable bright spot – more than doubling from a year ago in both volume (28,619 mt, up 129 percent) and value ($45.6 million, up 107 percent).
  • Pork exports to the Dominican Republic continued to gain momentum in 2018, easily surpassing previous records for both volume (42,669 mt, up 39 percent) and value ($92.5 million, up 30 percent).

U.S. lamb export volume largest since 2012

Mexico’s strong demand for U.S. lamb variety meat fueled a rebound in 2018 lamb exports, with combined lamb/lamb variety meat shipments climbing 77 percent in volume to 12,866 mt, the largest since 2012. Export value increased 19 percent to $23.4 million, the highest since 2014. While this was primarily driven by larger variety meat exports, lamb muscle cuts also achieved promising growth in the Caribbean, the United Arab Emirates and the Philippines. Japan and Taiwan are also potentially strong destinations, having reopened to U.S. lamb in 2018 and 2016, respectively.

Complete 2018 export results for U.S. beef, pork and lamb are available from USMEF’s statistics Web page.

Monthly charts for U.S. pork and beef exports are also available online.

If you have questions, please contact Joe Schuele at jschuele@usmef.org or call 303-547-0030.

NOTES:

  • Export statistics refer to both muscle cuts and variety meat, unless otherwise noted.
  • One metric ton (mt) = 2,204.622 pounds.
  • U.S. pork currently faces retaliatory duties in China and Mexico. China’s duty rate on frozen pork muscle cuts and variety meat increased from 12 to 37 percent in April and from 37 to 62 percent in July. Mexico’s duty rate on pork muscle cuts increased from zero to 10 percent in June and jumped to 20 percent in July. Beginning in June, Mexico also imposed a 15 percent duty on sausages and a 20 percent duty on some prepared hams.
  • U.S. beef faces retaliatory duties in China and Canada. China’s duty rate on beef muscle cuts and variety meats increased from 12 to 37 percent in July. Canada’s 10 percent duty, which also took effect in July, applies to HS 160250 cooked/prepared beef products.

The National Pork Board recently kicked off activities for this week’s Pork Industry Forum in Orlando. The 15-member board packed 900 meals to help feed hungry children in the area in partnership with the Second Harvest Food Bank of Central Florida. Contributing to a better way of life in the communities where pig farmers live and work is one of the We CareSM ethical principles.

“The We Care ethical principles form the core of who we are as farmers. It is important to not only talk about our principles, but to live them out every day both on the farm and in our travels,” said Steve Rommereim, president of the National Pork Board and a pig farmer from Alcester, South Dakota. “While we have important business to attend to during the National Pork Industry Forum, we are never too busy to give back to communities, even those that we visit for a short period of time.”

Second Harvest Food Bank’s Hi-Five Kids Pack program will distribute the meals. Since 2006, the program supports educators seeking a solution to students who came to school sick and unable to learn on a Monday because they had not eaten since their school lunch the previous Friday. Second Harvest Food Bank partners with elementary schools that have a significant percentage of student participation in free and reduced-cost lunch programs to distribute the packs.

“These food packs are vitally important by offering kid-friendly items such as cereal, shelf-stable milk and juice and fruit cups,” said Dave Krepcho, President and CEO of the Second Harvest Food Bank. “We appreciate the support of the U.S. pork industry this week, especially the protein-rich pork sticks provided by the Iowa Pork Producers Association. This is something new and different for our clients.”

Producer delegates from across the country are in Orlando this week for the annual National Pork Industry Forum. This business meeting allows directors and staff of the National Pork Board to hear directly from Pork Act delegates appointed by the U.S. Secretary of Agriculture.