How U.S. pork exports broke records in 2020

In 2020, the value of U.S. pork & pork product exports to the world reached a record $7.7 billion, up 11 percent from the prior year. The top three markets, accounting for 66% of exports, were China at $2.3 billion, Japan at $1.6 billion, and Mexico at $1.2 billion. China overtook Japan as the top market for U.S. pork as African swine fever (ASF) continued to limit China’s domestic pork supplies and buoy demand for imports. However, exports to Japan also rebounded with implementation of lower tariffs under the U.S.-Japan Trade Agreement and major U.S. competitors increasingly focused on the Chinese market. Meanwhile, U.S. exports to Mexico struggled in 2020 as a depreciating peso and weak economy stifled import demand.

Drivers

• China became the largest market for U.S. pork in 2020, generating an additional $1 billion in exports over the previous year, due to decreased Chinese production resulting from ASF.
• Exports to Japan increased $100 million as the tariffs faced by U.S. pork were reduced as part of the U.S.-Japan Trade Agreement.
• Import demand in the Philippines and Vietnam rose as those countries attempt to manage ASF outbreaks, leading to an additional $60 million in U.S. exports.
• A weak Hotel, Restaurant, and Institutional sector in South Korea depressed U.S. exports to that market by $140 million in 2020.
• A difficult economic environment and devalued peso limited Mexican buying power and led U.S. exports to decline by more than $100 million.
• Exports of pork to Colombia dropped 34 percent in 2020 because of strict COVID-19 lockdowns that lowered demand in the food service sector.
• Decreased transshipment of products to China is primarily responsible for a $63 million reduction in pork exports to Hong Kong last year.

Looking ahead

While Chinese pork prices remain high and import demand will continue to be considerably higher than the pre-ASF era, China imports are expected to contract year-over-year as their hog sector recovers. Increased competition in the Chinese market will cause U.S. pork export volumes to ease from the 2020 record. Lower exports to China will be partially offset as improving economic conditions promote growth in traditional markets such as Mexico and South Korea. Additionally, the Philippines and Vietnam are poised for robust import demand as these countries continue to rebound from ASF.

In addition to impacting global import demand, ASF has the potential to reshuffle global trade flows as major exporters cope with the disease. Towards the end of 2020, the discovery of ASF in Germany in feral swine effectively restricted German pork exports to key Asian markets. Ultimately, the ability to shift supply chains on the continent, with other member states picking up the slack, prevented total EU27+UK exports from severe impacts.