COLUMN-China dampens interest in American pork but fills up with beef -Braun


Band Karen Braun

FORT COLLINS, Colorado, September 21 (Reuters)The US pork trade with China made a big breakthrough two years ago as the Chinese pig herd was reduced by disease and political relations began to recover, although US exports to the main consumer of pigs did not perform as well this year as those of other suppliers.

China’s pork production is expected to weaken in 2022 due to a smaller herd and low producer profits, which should also facilitate consumption, as the gap will not be closed by imports.

The United States is China’s second-largest supplier of pork after Spain, but sales may have slowed more than expected. China’s increased affinity for American beef is at least offsetting part of that, pushing those exports to record highs.

Pork prices in China last week fell to their lowest levels since early 2019, when the world market first learned of the severity of African swine fever (ASF) in Chinese pigs. These prices are more than 60% lower than a year ago, making producer profitability very low or negative.

That is expected to limit next year’s pork production, which the U.S. Department of Agriculture’s Beijing office last month estimated at 41.5 million tonnes. That would be down nearly 14% from its estimate for this year and up 14% from 2020, but well below pre-FAA levels of around 54 million tonnes.

This has been a concern for global grain and oilseed traders, as if China’s pork production declines, it could reduce its demand for importing animal feed ingredients, especially if China has record cereal harvests expected this year. However, this can be good news for meat exporters.

SLOWING PORK IMPORTS

The increase in pork production this year compared to last year has facilitated Chinese imports of its staple proteins. August imports totaled 280,000 tonnes, the lowest monthly volume in over a year and down 21% from August 2020. January-August volume reached 2.93 million tonnes, up just 1% from the same period last year, according to customs data.

May 2021 marked the first time in more than a year that China’s monthly pork imports were lower than in the same month a year earlier, and that gap from 2020 has widened every month since.

China’s dependence on American pork appears to be declining more than its overall imports. Monthly US pork exports to China have not been greater than the previous year since November. (https://tmsnrt.rs/39wC6Gp)

As of September 9, China had purchased 361,454 tonnes of fresh, chilled or frozen American pork muscle cuts for export in 2021, and 7% are still waiting to be shipped. These commitments are down about 43% from the same date in 2020, but up 29% from 2019, and they represent 25% of all sales in the United States in 2021.

Around the same time last year, China accounted for 39% of all pork sales to the United States and Mexico was second with 25%, although Mexico leads in 2021 with 34% as its purchases are in. increase of around 19% over the year.

Until July 2021, exports of U.S. pork and pork products to China were down 20% from the same period a year ago. But pork exports from Europe and Brazil to China during this period were up from last year. The European Union accounts for around 60% of China’s pork imports and Brazil is the third largest supplier.

BEEF RISE

U.S. exports of beef and beef products to China took off sharply in 2021, and the USDA attributes this in part to the ability and willingness of Chinese consumers to pay more for what is considered protein. luxury.

Beijing lifted a 14-year ban on American beef in 2017, although the most notable impact on American businesses has materialized this year. High domestic beef and pork prices have also boosted recent growth in beef imports.

Sales of fresh, frozen or chilled U.S. beef in China totaled 130,319 tonnes as of September 9, up nearly 400% from a year ago and more than 20 times the volume for 2019 to date. These sales represent 15% of sales to all buyers.

From January to July, US beef exports to China exceeded 99,000 tonnes, accounting for 12% of exports to all destinations, compared to 1.3% for the whole of last year. So far in 2021, China is the 4th recipient of American beef behind Japan, South Korea and Mexico, up from 8th in 2020 and 13th in 2019. (https://tmsnrt.rs/2Zl6PVh)

The price of beef relative to other meats makes these exports stand out in terms of dollar value. At $ 773 million, U.S. beef exports to China in the first seven months of the year accounted for 4.5% of all U.S. agricultural exports to the Asian country, compared with 1% for the entire year 2020.

That puts the beef at No.7 on the list so far this year. Corn was the main U.S. commodity to China between January and July, valued at $ 4.1 billion, and soybeans ranked second at $ 3.6 billion.

Countries in South America as well as Australia and New Zealand also supply China with beef. The USDA counterpart in Beijing reports that the United States is seen as a high-priced beef supplier providing consistent, standardized high-end cuts.

The agency predicts that China’s beef imports in 2022 will increase 6% to a new record 3.3 million tonnes. Next year’s pork imports are pegged at 5.1 million tonnes, slightly below the 2020 peak.

Chart – US pork exports to Chinahttps://tmsnrt.rs/39wC6Gp

Chart – Beef exports from the United States to Chinahttps://tmsnrt.rs/2Zl6PVh

(Edited by Matthew Lewis)

(([email protected]; Twitter: @kannbwx))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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