EU/UK pigmeat exports face increased US competition

Rising US pigmeat output, which is set to hit a record high this year, is raising questions over the EU’s ability to cope with increased competition on the global market, according to AHDB Pork.

Noting that US production is forecast to climb by as much as 5% in 2017, reaching nearly 12 million tonnes, AHDB Pork warns that US exports are also heading for major growth this year, potentially by almost 2.5m/t.

“The question is, how much will this extra pigmeat threaten the position of other global exporters, such as the EU, including the UK,” said AHDB Pork, adding that the latest US export forecast might actually prove to be too low, particularly given the current lacklustre demand for pork and strong competition between meats in the US.

“With the domestic market only able to absorb some of the surplus, the pressure to raise exports will inevitably be intense. Shipments already reached a record level during November last year, buoyed by competitive prices. This had a negative impact on the EU’s share of the Asian pork market.

“However, EU exporters have so far been somewhat protected by relative strength of the US dollar. In addition, the need to licence new processing plants for export, and restrictions to locations Ractopamine-treated pork can be shipped, could provide EU exporters with some respite looking forward.”

AHDB Pork’s overall conclusion, however, is that it seems inevitable there will be increased competition between UK/EU pork and US product this year, with the scale of demand for product in Asia, and in particular China, being crucial for determining how the market pans out and what the implications for the UK might be.

See full AHDB Pork report

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