KANSAS CITY — While the spread of African swine fever (A.S.F.) in Asia and plant-based protein “meat” alternatives in the United States garnered many headlines in 2019, U.S. 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 A.S.F. in China occurred. With attempts to control A.S.F. 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 A.S.F., although official estimates from China are much lower, but still dramatic — in the 20%-to-30% range. The disease has slashed pork supplies in many countries, especially China, and reduced feed demand. The global impact of A.S.F. began to emerge during the year.
The long-term effect of A.S.F. 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 A.S.F. 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 U.S. Department of Agriculture, in its September Livestock, Dairy and Poultry Outlook, forecast 2019 U.S. pork exports at 6,530 million lbs, up 11% from 2018, and 2020 exports at 7,065 million lbs, up another 8%. The increase was due to strong exports to Mexico and China.
In July, Mexico, the top importer of U.S. pork, took 150,753,000 lbs of U.S. pork, up 18% from July 2018 and equal to 28% of total U.S. 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% from July 2018 and equal to 21% of the July total. China moved from the fifth largest importer of U.S. pork in July 2018 to the second largest in 2019, displacing Japan. Total pork exports in July were up 27% from July 2018.
Strong U.S. exports will be needed as annual domestic production continued to set record highs. The U.S.D.A. forecast 2019 U.S. pork production at 27,578 million lbs, up 4.8% 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%.
Beef, broiler production climbs
Beef production in the United States was forecast at 26,953 million lbs in 2019, up 0.3% 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% from 2019.
Broiler production, which has set records every year since 2009, was forecast at 43,467 million lbs in 2019, up 2% from 2018, and at 44,000 million lbs in 2020, up 1.2% from this year.
The U.S.D.A. forecast total 2019 U.S. 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% from 2018 and the highest since 2007, and at 223.2 lbs in 2020, up another 0.8%. Per capita beef disappearance was forecast at 57.2 lbs, flat with 2018. Other forecasts had pork at 51.8 lbs, up 1.8%, broilers at 93.9 lbs, up 1.6%, and turkey at 16 lbs, down 1.2% 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, U.S. pork exports to China still accounted for only 9% of that country’s total pork imports, with 62% coming from the European Union, 15% from Canada and 10% from Brazil.
The U.S.D.A. said in its Outlook that pork imports by China began to reflect losses to A.S.F. in April, about eight months after the disease was first reported. August live hog prices in China, meanwhile, were up 62% from a year ago and were up 22% in August alone. The national price of pork jumped 20% in August and was up 53% from a year ago. As a result, exports of U.S. 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 U.S. meat exports. Japan is the leading “value destination” for U.S. beef and pork exports, according to the U.S. Meat Export Federation (U.S.M.E.F.). 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 U.S. farmers and ranchers, and for everyone in the red meat supply chain, because it will level the playing field for U.S. pork and beef in the world’s most competitive red meat import market,” said Dan Halstrom, president and chief executive officer of U.S.M.E.F. about the deal with Japan. “It is also a very positive development for our customer base in Japan, which U.S.M.E.F. and our industry partners have spent decades building. These customers have been very loyal to U.S. pork and beef, but our exports to Japan could not reach their full potential under Japan’s current tariff structure.”
Another issue that may boost international demand for U.S. meat and poultry is the ratification of the U.S.-Mexico-Canada Agreement. At press time, the U.S.M.C.A. was still under consideration by Congress.