World pork markets were disrupted the last couple of years, first by African swine fever in China, followed by a U.S.-China trade dispute. Then, in 2020, came COVID-19.
ASF drastically reduced pork production in China starting in 2018 and continuing into 2020. This reduction created a tremendous opportunity for the U.S. to increase pork exports to China to help fill the animal protein void in Chinese consumers’ diets. So, what has taken place in 2020?
Despite pork supply chain disruptions in the U.S. resulting from the COVID-19 pandemic, U.S. pork exports have increased dramatically. From January through May, exports rose 21% above the prior year. But it’s clear that exports would have been even larger without the disruptions that occurred as COVID-19 infections caused processing plant closures and slowdowns.
The pandemic also created weakness in some major importers’ economies. You can see this when looking at monthly export totals. U.S. pork exports during January rose 39% above a year earlier, while February’s total was up 46% compared to February 2019. But April and May pork exports, although remaining strong, rose a combined 22% above the same period in 2019.
That was still an impressive performance, however, given that pork production during that two-month period was 13% lower than during April and May 2019, as a result of plant closures and slowdowns.
China drives exports
It comes as no surprise that rising exports to China are almost entirely responsible for the increase in U.S. pork exports. During the first five months of 2020, exports to the Chinese mainland rose by 427% compared to 2019, totaling nearly 1.1 billion pounds in 2020, compared to 202 million pounds in 2019. Exports to Hong Kong, although much smaller than exports to the mainland, more than doubled, climbing to over 30 million pounds versus 14 million pounds a year earlier. Combined, exports to China and Hong Kong amounted to one-third of all U.S. pork exports in 2020, compared to just 17% of exports during the same period in 2019.
Exports to other major importers of U.S. pork changed little compared to a year earlier. In several cases, they were actually weaker from January through May versus a year earlier. Exports to Mexico, the No. 1 destination for U.S. pork in 2019, were virtually unchanged from January to May compared to a year earlier, while shipments to Japan, the No. 2 destination in 2019, rose just 7% from January to May. By May, as the impact of COVID-19 was spreading, exports to both these major pork importers fell well below a year earlier.
Pork exports during January through March absorbed 29% of U.S. production. To help put that in perspective, pork exports from 2017 through 2019 ranged from 22% to 23% of U.S. production. For the rest of 2020, it looks like strength in U.S. pork export volume will be dependent on how much pork China imports. Recovery in pork exports to other major importers of U.S. pork will require economic recovery in those countries, which could take some time.