KANSAS CITY, Mo. — While the spread of African Swine Fever (ASF) in Asia and plant-based meat alternatives in the United States garnered many headlines in 2019, US red meat and poultry supplies remained ample, if not record high. Per capita red meat and poultry disappearance in the United States in 2019 was forecast at a 12-year high. Pork exports soared.
It was August 2018 when the first reported outbreak of ASF in China occurred. With attempts to control ASF but no indication of success in China, the deadly hog disease has spread throughout Asia, including outbreaks in the Philippines and South Korea reported in September. It has been estimated that as much as half of China’s hog herd (the world’s largest at more than 700 million) has been lost or culled because of ASF, although official estimates from China are much lower, but still dramatic — in the 20 percent-to-30 percent range. The disease has slashed pork supplies in many countries, especially China, and reduced feed demand. The global impact of ASF began to emerge during the year.
The long-term effect of ASF is beginning to play out, but the current instability in the market likely will linger until the cause of the disease spread is interrupted, according to the financial services firm Rabobank in its October report “African swine fever: A global update.” Until factors such as improvements in biosecurity are established or an effective ASF vaccine is available for widespread use, market volatility was expected to continue.
“We anticipate relatively unstable market conditions over the coming three to five years,” Rabobank said in the report.
The US Department of Agriculture, in its September Livestock, Dairy and Poultry Outlook, forecast 2019 US pork exports at 6,530 million lbs., up 11 percent from 2018, and 2020 exports at 7,065 million lbs., up another 8 percent. The increase was due to strong exports to Mexico and China.
In July, Mexico, the top importer of US pork, took 150,753,000 lbs. of US pork, up 18 percent from July 2018 and equal to 28 percent of total US pork exports. Tariffs on pork exports to Mexico were lifted in May after being imposed in June 2018. Shipments to China/Hong Kong totaled 112,671,000 lbs. in July, up 380 percent from July 2018 and equal to 21 percent of the July total. China moved from the fifth largest importer of US pork in July 2018 to the second largest in 2019, displacing Japan. Total pork exports in July were up 27 percent from July 2018.
Strong US exports will be needed as annual domestic production continued to set record highs. The USDA forecast 2019 US pork production at 27,578 million lbs., up 4.8 percent from 2018, the fifth consecutive record high and surpassing beef production for the first time since 2015 and only the second time since 1952. Pork outturn was projected at 28,410 million lbs. in 2020, up another 3 percent.
Beef, broiler production climbs
Beef production in the United States was forecast at 26,953 million lbs. in 2019, up 0.3 percent from 2018 and second only to 27,091 million lbs. in 2002. Production in 2020 was projected at a record high 27,670 million lbs., up 2.7 percent from 2019.
Broiler production, which has set records every year since 2009, was forecast at 43,467 million lbs. in 2019, up 2 percent from 2018, and at 44,000 million lbs. in 2020, up 1.2 percent from this year.
The USDA forecast total 2019 US red meat (beef, pork, lamb, mutton) and poultry (chicken and turkey) per capita disappearance (retail basis, including exports, thus not the same as per capita consumption) at 221.4 lbs., up 0.9 percent from 2018 and the highest since 2007, and at 223.2 lbs. in 2020, up another 0.8 percent. Per capita beef disappearance was forecast at 57.2 lbs., flat with 2018. Other forecasts had pork at 51.8 lbs., up 1.8 percent, broilers at 93.9 lbs., up 1.6 percent, and turkey at 16 lbs., down 1.2 percent and the third consecutive year of slight decline.
With pork production increasing faster than beef or poultry, the boost in exports increasingly came into focus. Even with the increase, US pork exports to China still accounted for only 9 percent of that country’s total pork imports, with 62 percent coming from the European Union, 15 percent from Canada and 10 percent from Brazil.
The USDA said in its Outlook that pork imports by China began to reflect losses to ASF in April, about eight months after the disease was first reported. August live hog prices in China, meanwhile, were up 62 percent from a year ago and were up 22 percent in August alone. The national price of pork jumped 20 percent in August and was up 53 percent from a year ago. As a result, exports of US pork to China may remain strong, at least until that country’s hog herd is replenished, which most in the industry expect will take several years.
In early October, the United States and Japan officially signed a trade deal that will bolster US meat exports. Japan is the leading “value destination” for US beef and pork exports, according to the US Meat Export Federation (USMEF). The combined export value of beef and pork shipped to Japan in 2018 was $3.7 billion. The ratification of the Trans-Pacific Partnership, from which the United States pulled out, left exporters at a disadvantage in the market.
“This announcement is tremendous news for US farmers and ranchers, and for everyone in the red meat supply chain, because it will level the playing field for US pork and beef in the world’s most competitive red meat import market,” said Dan Halstrom, president and CEO of USMEF about the deal with Japan. “It is also a very positive development for our customer base in Japan, which USMEF and our industry partners have spent decades building. These customers have been very loyal to US pork and beef, but our exports to Japan could not reach their full potential under Japan’s current tariff structure.”
Another issue that is expected to boost international demand for US meat and poultry is the ratification of the US-Mexico-Canada Agreement (USMCA). The USMCA was approved by the US Senate Jan. 16 after approval by the US House of Representatives in December. The trade deal’s final step is approval by President Trump.