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USMEF: Record-breaking pork exports to Mexico

Pork

Pork exports continued to gain momentum in December, led by another outstanding performance in Mexico. Pork exports finished 2022 on a decidedly upward trajectory as December shipments reached 244,718 mt, up 13% year-over-year and the second largest of 2022 (slightly below November). December export value climbed 14% to $687.3 million. These results pushed 2022 exports to 2.67 million mt, down 8.5% from a year ago, while export value was $7.68 billion – down 5% from the record achieved in 2021.

Posted on Feb 13 ,00:10

Pork exports to Mexico ended 2022 on a very high note, setting a volume record in December on the way to a record-breaking year. December exports also trended higher year-over-year to China/Hong Kong, the Dominican Republic, the Philippines and Australia, and set a value record in Central America.

"The Mexican market has been a star performer for U.S. pork for many years, but the 2022 results were truly remarkable," said USMEF President and CEO Dan Halstrom. "In the face of growing competition in Mexico, the U.S. pork industry has expanded product offerings and found innovative ways to meet the needs of processors, retailers and foodservice operators. In addition to Mexico, it is gratifying to see such a broad range of markets contributing to our recent export growth, making the prospects for 2023 very promising."

Following a huge performance in November, pork exports to Mexico posted another volume record in December at 90,175, up 13%. December export value was $198.3 million, up 42% and the third highest on record. These results pushed 2022 exports to a record 959,701 mt, up 10% from a year ago, while export value soared 21% to $2.03 billion, topping the $2 billion mark for the first time. Demand for U.S. pork is surging despite heightened competition in Mexico, where imported pork, beef and poultry from all eligible suppliers have entered at zero duty since May and duties will remain suspended through the end of this year. Mexico also recently opened for the first time to Brazilian pork, provided that it originates from approved plants in the state of Santa Catarina and goes directly into further processing.

Pork exports to the Dominican Republic also closed 2022 with remarkable momentum, posting the second largest volume on record in December at 9,466 mt (up 80% year-over-year, trailing only November 2022). December export value more than doubled from a year ago to $28.8 million, up 125%. Exports to the DR set annual records in both volume (85,551 mt, up 46%) and value ($233.6 million, up 55%). The DR also temporarily suspended import duties on red meat and poultry in June, which attracted more Canadian and European pork. But the decree suspending these duties has expired, meaning the U.S. is once again the only major pork supplier with duty-free access while imports from other major suppliers are subject to the DR’s most-favored-nation rate of 25%.

Pork exports to China/Hong Kong were slow in the first half of 2022 but strengthened notably in the second half. This trend continued in December as exports reached 56,230 mt (up 66% year-over-year), valued at $137.7 million (up 49%). While this was largely driven by demand for variety meat (see below), pork muscle cut exports to the region also increased 53% to 20,522 mt, valued at $55.9 million (up 75%). For the full year, pork and pork variety meat exports to China/Hong Kong were down 26% to 542,443 mt, valued at $1.39 billion (down 20%).

Following another excellent performance in December, pork variety meat exports averaged a record $10.15 per head slaughtered in 2022. December volume was 54,056 mt, up 54% from a year ago, while export value increased 35% to $124.4 million. In both volume and value, December exports were the third largest on record. 2022 exports of U.S. pork variety meat totaled 530,290 mt, up 2% year-over-year and the second largest on record, while export value was record-high at $1.27 billion (up 3%). Exports to China/Hong Kong set annual records for both volume (338,467 mt, up 3% year-over-year) and value ($841.1 million, up 4%), while shipments also increased to the Philippines, Japan, Korea, Guatemala, Colombia, the Dominican Republic and South Africa.

Other results for U.S. pork exports in 2022 include:

• Exports to South Korea increased 5% from a year ago to 174,553 mt, valued at $608.1 million – up 9% and the highest since 2018. Korea also broadened access for several pork suppliers last year by opening a 70,000 mt, duty-free quota for imported pork, and recently announced a 10,000 mt duty-free quota for the first half of 2023. Imports from the U.S., the European Union and Chile already enter Korea at zero duty, but Canadian, Mexican and Brazilian pork can benefit from the quota.
• Though exports to Colombia fell slightly short of the 2021 record, it remains a critical destination for U.S. pork – both for further processing and in the country’s rapidly expanding retail and foodservice sectors. 2022 exports to Colombia were 4% lower year-over-year in both volume (101,828 mt) and value ($247.6 million).
• Similar to Colombia, pork exports to Central America fell below 2021’s record levels but were the second largest on record at 119,169 mt (down 15% year-over-year), valued at $338.1 million (down 10%). December exports to the region were up slightly from a year ago in volume (15,054 mt, up 1%), while value soared 21% to a record $44.6 million.
• December pork exports to the Philippines reached 3,217 mt, up 44% from the low volume posted a year earlier, while value climbed 76% to $10.2 million. For the full year, exports to the Philippines were still down 43% to 45,007 mt, valued at $133 million (down 35%). The Philippines traditionally maintains the highest duty rates of any major pork importer. But since mid-2021, imported pork cuts have been subject to duties of 15% in-quota and 25% out-of-quota – down from 30% and 40%, respectively. The reduced rates were recently extended through the end of 2023, expanding opportunities in this price-sensitive market.
• While Japan remains the second largest value market (behind Mexico) for U.S. pork exports, shipments trended lower in 2022. Exports to Japan were down 10% year-over-year to 356,228 mt, with value declining 13% to $1.47 billion. Similar to other Asian markets, U.S. pork faced intense price competition from European pork in Japan, particularly contributing to the decline in U.S. exports of ground seasoned pork. However, U.S. competitiveness is expected to improve in 2023.
• Pork export value equated to $61.26 per head slaughtered in 2022, down 2.5% year-over-year (the December per-head average was $66.74, up 22% and the second highest of 2022). Exports accounted for 27.5% of total 2022 pork production, down about two percentage points from a year ago. The ratio for muscle cuts was 23.7%, down from 26% in 2021.

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