Livestock Markets: Pork Export Variables and China

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    Earlier this month, in its Livestock and Poultry: World Markets and Trade report, the USDA’s Foreign Agricultural Service (FAS) stated that, “Driven by higher estimates for pork, the China total meat import forecasts for both 2020 and 2021 are revised 4 and 1 percent higher, respectively. While pork import growth slowed in the fourth quarter of 2020, it nevertheless exceeded expectations and results in a more bullish outlook for 2021.

    Livestock and Poultry: World Markets and Trade. USDA- Foreign Agricultural Service (January 12, 2021). Click Image to Enlarge

    “The impact of African swine fever (ASF) is expected to have reached its zenith in 2020, pressuring consumption and increasing the country’s reliance on meat imports. Despite the elevated pace of trade, China meat consumption in 2020 fell to its lowest level in more than a decade.

    “In 2021, higher estimates for both China pork production and imports lead total meat consumption up 2 percent from the prior forecast. However, total meat consumption is still expected to be below pre-ASF levels.”

    FAS added that, “Abundant exportable supplies around the world are expected to find a home in China as consumption in this key market continues to be well below pre-ASF levels.”

    Graph from Arlan Suderman, Chief Commodities Economist for StoneX Group, Inc. Twitter Post (January 20 – https://bit.ly/3924u3N). Click Image to Enlarge

    With respect to U.S. pork exports, the USDA’s Economic Research Service (ERS) pointed out in its monthly Livestock, Dairy, and Poultry Outlook report this week, that, “U.S. pork exports in November were almost 633 million pounds, about 1.5 percent larger than a year ago.

    “Although China\Hong Kong was the largest buyer in November—171 million pounds, 3.6 percent higher than a year earlier, accounting for 27 percent of November exports—expansion of shipments to China\Hong Kong have been slowing since the summer months.”

    Livestock, Dairy, and Poultry Outlook, LDP-M-319, U.S. Department of Agriculture, Economic Research Service, January 19, 2021. Click Image to Enlarge

    ERS added that, “The annual 2021 pork export forecast is reduced from last month and is now expected to fall below the forecast 2020 total.

    This conclusion is based on expectations for continued slowing of demand for imported pork in China\Hong Kong as the Chinese pork sector adjusts to African Swine Fever and rebuilds production capacity losses sustained by the sector since the 2018 discovery of the disease in Northern China.

    Meanwhile, a separate FAS report this month (“EU Pork Exports Reached Record Levels in 2020“) indicated that, “During the first ten months of 2020, the European Union (EU) exceeded the pork export volume for all of 2019 (setting a new record for exports).

    “EU Pork Exports Reached Record Levels in 2020.” USDA- Foreign Agricultural Service. Report Number: E42021-0008 (January 15, 2021). Click Image to Enlarge

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    “EU pork exports rose based on strong demand from China and sustained production despite the transport, slaughter, and export restrictions during the coronavirus crisis and the emergence of new African Swine Fever detections.”

    Reuters News reported this week that, “Another 30 cases of African swine fever (ASF) have been found in wild boars in eastern Germany, authorities said on Wednesday, in a continuing outbreak among wild animals which has halted German pork exports to Asia.”

    Other European Union countries have expanded pork exports to Asia to replace German supplies, in turn opening up sales opportunities for Germany inside Europe,” the Reuters article said.

    “EU Pork Exports Reached Record Levels in 2020.” USDA- Foreign Agricultural Service. Report Number: E42021-0008 (January 15, 2021). Click Image to Enlarge

    And earlier this week, Reuters writer Dominique Patton reported that, “China’s pork output fell less than expected last year as it recovered from the impact of an incurable hog disease that depleted breeding stock, official data showed on Monday.

    “China’s 2020 pork output declined by 3.3% from a year earlier to 41.13 million tonnes after plunging 21% in 2019, the National Bureau of Statistics (NBS) said.

    “Some analysts expected a bigger fall in 2020 after an outbreak of African swine fever hit China in mid-2018 and meant the country’s breeding stock had declined an estimated 60% by mid-2019.”




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