In the War of Meats, Beef is Out-Pacing Pork

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As the appetite for animal protein grows around the world, American farmers and ranchers seek to expand their businesses to meet the growing demand. In fact, the World health Organization predicts that global livestock production will reach 376 million tons by 2030. While American producers and growers may have the capacity to meet this worldwide challenge, some may have greater opportunity to do so than others. If recent statistical export trends are any indication, beef producers are rising to the occasion with greater speed and success than their hog farming peers. To their defense, the pork producers face different obstacles.

How do the numbers add up? As a fraction of total production, beef exports rose from 12.5 percent to 13.2 percent between the summers of 2017 and 2018. This constitutes 95,181 metric tons. Accounting for beef muscle cuts alone, the increase went from 10.4 percent to 11.3 percent. Moreover, the per-head export value gains 11 percent over 2017. Pork exports, by contrast, dropped one percent over the same period, landing at 182,372 metric tons. Meanwhile, total export value dropped three percent–one percent among muscle cuts, which fared better. Even pork variety meats, i.e. entrails and organs, took it on the snout with a 20 percent plunge in volume and a 15 percent lowering in value.

Pigs In A Cage

Why is beef enjoying more of the world’s favor as opposed to pork? For one thing, it is no secret that countries like China and Mexico have responded to U.S. tariffs on steel and technology (among other things) with their own duties against American agricultural commodities, pork first and foremost. For example, China’s duties on U.S. pork rested at 12 percent prior to April of 2018, when they more than tripled to 37 percent in April, nearly doubling again to 62 percent in July. Mexico’s tariff rates went from zero (under the NAFTA rules) to 20 percent in July of 2018. The effects of recent renegotiated trade deals (USMCA) have yet to be realized, especially for pork giants like Smithfield.

China–its population massive and hungry–is nevertheless not a major destination for American beef. Should trade wars escalate, it may never be. Still, the nation-states that are dependable consumers of U.S. cattle meat are showing healthy demand for more. Japan, South Korea and Mexico–the three top purchasers–have each upped their imports of beef from the United States, South Korea by over 40 percent. Unfortunately, pork depends on the markets of countries with strident retaliation regimes. This puts greater pressure on domestic markets. Hog farmers and commodity groups may look to the largest beef-buying nations to increasing their pork intake.

While protein enjoys international craving, the sources of protein suit national tastes differently. Beef, pork, poultry and other meats will find niches and their marketers will do their best to exploit those slots. Ultimately, though, even the hungriest populations have their limits: when tariffs rise to high on any given commodity, consumers will buy less of it. Pork now suffers this fate; beef does not. Yet. Time will tell if roles get reversed.