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Column: Record U.S. pork exports to China in April, but measly volume to others

FORT COLLINS, Colo. (Reuters) - U.S. pork exports to China hit an all-time high in April, but exports to all other destinations fell near four-year lows as the U.S. product has become pricier.

Hog farmer Mike Patterson's animals, who have been put on a diet so they take longer to fatten up due to the supply chain disruptions caused by coronavirus disease (COVID-19) outbreaks, at his property in Kenyon, Minnesota, U.S. April 23, 2020. Picture taken April 23, 2020. REUTERS/Nicholas Pfosi/File Photo

The United States exported 264,050 tonnes of pork and pork products in April, according to data published Thursday by the U.S. Census Bureau. That was down 9% from March shipments, which were an all-time high for any month, but up 22% from the previous April.

Pork exports to China in April reached 112,327 tonnes, topping December 2019’s record of 102,177 tonnes. That was up 17% from March.

China’s pork production has been significantly lower for nearly two years due to a widespread outbreak of African swine fever in its hog herd. The U.S. Department of Agriculture estimates that China will account for 40% of the world’s pork imports in 2020, which compares with 20% in both 2017 and 2018.

Increased shipments to China have substantially lifted U.S. pork exports, but those record numbers fade when removing China from the mix. Pork and pork product exports to all other destinations in the first four months of the year totaled 709,327 tonnes, a four-year low for the period.

That effect was most extreme in April, when non-China shipments reached 151,723 tonnes, the smallest for any month since July 2016. That was down 22% from March and down 18% from April 2019.

U.S. export prices for frozen, fresh or chilled cuts of swine meat in April averaged $2,588 per tonne, the lowest in exactly a year. But that was the highest April price since 2014.

Domestic U.S. pork prices surged in May as slaughterhouses shut down amid the coronavirus pandemic. Last month’s export sales of fresh, frozen and chilled cuts of pork, which account for about 75% of all U.S. pork product exports, plunged nearly 75% from April. But actual shipments may have only been about 15% lighter.

Although increased trade with China is a primary goal for U.S. agriculture, many began to question back in April and May whether the record sales and shipments to the Asian country were ethical, considering the domestic meat shortages caused by U.S. slaughterhouse closures.

But in no way could this ensure food security in China. U.S. pork exports were record-high in 2019 thanks to increased trade with China in the latter half of the year, but the U.S. shipments accounted for only 1% of total Chinese consumption last year. Chinese pork production in 2019 fell more than 20% on the year.

U.S. slaughter capacity has since rebounded, but it is still reduced. USDA estimated hog slaughter at 445,000 head on Monday, up 55% from the last week of April but down 10% from the more normal levels seen in March. That number is the largest printed by USDA since April 15.

BOUNTIFUL YEAR FOR AMERICAS?

The United States is the leading global exporter of pork, though Canada and Brazil also supply a significant amount. USDA estimates those three countries will account for 55% of global pork exports in 2020.

Canada and Brazil have also observed a substantial boost in business to China, as that dollar value in the first four months of 2020 has surged more than 100% over the year-ago period.

But non-China shipments are down, similar to the United States. Brazil’s were down 17% on the year between January and April. By value, Canada’s were up very slightly, but prices were likely higher.

In Brazil, export prices of fresh, frozen or chilled meat cuts were 21% higher than a year ago during the first four months of 2020. U.S. prices were 10% higher than a year ago.

China has grabbed a huge share of Brazilian exports this year accounting for 57% of the total through May. That compares with an average of 28% in all of 2018. About 36% of U.S. exports have gone to China in 2020, and that is up from an average of 13% in 2017.

When comparing exports among the three countries, it is interesting to note that per USDA data, Brazil and Canada did not start 2020 with a record number of pigs, but the United States did.

The opinions expressed here are those of the author, a market analyst for Reuters.

Editing by Leslie Adler

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