It has been an unusual and eventful year for livestock producers, with challenges getting their products to market, and maintaining crucial export markets.
Bill Even, CEO of the National Pork Board and a fourth-generation South Dakota farmer, says there has been a lot of uncertainty, but also a few silver linings for pork producers.
“One thing we noticed during the COVID pandemic is that our pork sales have tripled,” he says. “Our big footprint is generally in the grocery aisle, and so that really helped us out there.”
Even says exports remain a key part of the marketing picture for pork producers, and the livestock industry in general.
“We export about 30% of our production, so exports are a critically important part and growing part of our business,” he says.
The livestock industry began the year with strong export numbers in January, February and March. Beef and pork export volumes were higher than any of the previous five years in each of those months.
Dan Halstrom, CEO of the U.S. Meat Export Federation, says in April the impacts of the coronavirus situation around the world created some headwinds, with interruptions in production and declining purchasing power. Beef exports fell below last year’s totals, but stayed above $600 million in value. Pork exports in April stayed above last year, but slowed from the pace of growth in the first quarter.
“Considering all the challenges the U.S. red meat industry faced in April, export results were encouraging,” Halstrom says. “Exporters lost several days of slaughter and processing due to COVID-19, and shipments to Mexico and some other Latin American markets declined due to slumping currencies and the imposition of stay-at-home orders. But despite these significant headwinds, global demand for U.S. beef and pork remained strong.”
Halstrom credited a few reasons for the strong climate for exports early in the year and for helping them navigate the tricky coronavirus months. He says the ag trade deal with Japan helped provide a level playing field on inbound duties, and Australia, a top competitor with the U.S. to export beef into Japan, has seen very tight production numbers. China has also seen growth, with pork exports there at three times the level for this point last year, and beef exports up 35% in China, with the increase coming after the Phase 1 trade deal between the countries was implemented this spring.
“On the pork side, the numbers are large,” Halstrom says. “With African swine fever (reducing China’s pig numbers) and the emerging middle class in China, they’re looking for higher quality meat.”
Speaking on June 30, Halstrom says he does expect the May export numbers, due to be released in early July, to show continued coronavirus effects.
“You’re probably going to see more of an impact on May,” he says. “We were thinking May would take a real impact from the supply disruptions we had in late April and May. The weekly data, that’s not the whole picture, but that indicates the numbers held in there better than expected.”
The coronavirus situation led to changes in how people got their food, more use of delivery and online ordering around the world, and Halstrom says the export federation and livestock industry have worked to adjust to the changing conditions.
“The coronavirus situation has made us adapt,” he says. “It’s not business as usual … Demand was down, but I wouldn’t say it was down absolutely. I would say it shifted. We’ll continue to see that impact as we get the numbers.”
Halstrom says the key to building export markets that support livestock producers during uncertain coronavirus times and more normal situations is to maximize value. This often means exporting cuts that don’t have much of a market in the U.S. to countries that eat them or view them as a delicacy.
“It’s about finding the right situation and the right market to maximize value,” he says.
The pandemic is also a time to talk with other countries about how U.S. meat is suppliable, reliable and high quality, Halstrom says.
“We need to be comfortable telling our story,” he says. “We have a great story to tell.”
Even says this extends to domestic consumers.
“Our weekly polling shows 90% of consumers are still confident in U.S. pork and our pork system, despite all the challenges we’ve had up and down the supply chain,” he says.
However, Even says consumers also say it is important to evaluate the supply chain and find ways to improve it. One possibility is using technology to increase transparency and traceability in the supply chain, such as more information on the package about where the product comes from.
For livestock producers and the industry as a whole, now is a good time to be sharing information with consumers, as the food supply has been in the news and people’s normal ways of consuming food were altered.
“That really presents an opportunity for us in agriculture,” Even says. “We’ve got the public’s attention.”