Dermot Hayes, Distinguished Professor at Iowa State University shared his views on U.S. exports in the January-February issue of Farm Journal’s PORK. He has followed, influenced and visited growing export markets during his 31 years at Iowa State University. In this final excerpt, he discusses expanding markets, and shares his most rewarding moments of working with the U.S. pork industry.
In terms of emerging markets, Hayes says “we’re only tapping the potential in Central America.
“That region will go through the same boom Mexico went through, and their production costs are higher than in Mexico [which means exports from the U.S. will be in demand]. They have the same developing country increase in pork consumption,” Hayes says.
“Peru and Columbia are big markets now, but they’re going to be much, much bigger. Columbia is in the process of switching from chicken to pork. Pork consumption went from 4 kg per person up to 10 kg!”
Hayes gives credit to the U.S. National Pork Board for creative thinking and implementation of a recent marketing effort.
“Instead of fighting over market share, they [NPB] developed a cooperative generic pork campaign that was highly effective,” Hayes says. “Consumers just see that pork is healthy, there are no food safety issues, and that it’s coming from modern units. Consumers don’t know if that pork is from a production unit in Columbia or in the U.S., and it doesn’t matter. It’s an example of two industries working together to grow consumption and the model worked.”
Vietnam is another country that has excellent potential for U.S. exports, Hayes says.
“Vietnam is about 10 years behind China economically, but their policies are not that far behind,” he adds. “They’re just as pro-market as the Chinese.”
He notes there are about 100 million undernourished people in Vietnam eating a lot of rice and wheat right now, but they’re ready to switch if they can get access to inexpensive protein.
“The economy is booming and they have pro-trade policies and that’s creating economic opportunity,” Hayes says. “The first thing you do when you get money is buy your kids some decent quality protein.”
When asked what has been the most satisfying part of being involved in the pork industry, Hayes is proud of the fact that the U.S. has succeeded from being a net importer to a huge, huge exporter.
“You see it in parts of Iowa where livestock production has expanded, like Eagle Grove or Clarion or Webster City,” he says. “Those towns had lost their industrial base and were in decline. You go to their main streets now and they have restaurants opening and businesses growing. Many of them would not have survived if it hadn’t been for expansion in livestock production.
“I’m a free-market economist, so to have made predictions about what would happen if we let the markets work and then to see that happen has been gratifying,” Hayes says. “One of the first research projects I did when I came to Iowa State was to evaluate whether it was cheaper to ship the meat or the feed grains, and the answer was resoundingly in favor of meat. Now that we have access, to see it happen exactly as any economist could have predicted has been gratifying.”