u.s. pork in the global market and outlook
TRANSCRIPT
![Page 1: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/1.jpg)
September 28, 2016
U.S. Pork in the Global Market &
Outlook
![Page 2: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/2.jpg)
A Lost Message in Our Noisy Media• The U.S. has a massive, globally competitive
manufacturing sector• This sector had a $178 billion U.S. trade surplus over the
past 5 years• This manufacturing sector produces virtually zero waste
and is a model of ‘sustainability’• It cannot be outsourced
– This sector is broadly more competitive than any country on earth
– It is “land-based”• U.S. farmers and ranchers produce the safest, most
affordable food on earth
![Page 3: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/3.jpg)
Source: FRED, U.S. Federal Reserve Bank
![Page 4: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/4.jpg)
Why Trade?• Theory of trade: Produce what you do the best,
and trade for the rest (bananas, coffee)• Maximum value: The “Exploding Carcass”
– Match products with consumers ($575 million in offal exports in 2017; feet to Asia, rinds to Mexico)
• Trade is a two-way street– U.S. pork imports: 94 mil lbs/mo– U.S. pork exports: 417 mil lbs/mo– Should we fear imports?
• Only if we are not competitive…
• What is the net benefit of trade?
![Page 5: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/5.jpg)
Source: US Dept of Commerce
![Page 6: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/6.jpg)
U.S. Agriculture Trade
Three Questions
Globalization: Friend or Foe?Free Trade Agreements?
Is China the Market of the Future?
![Page 7: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/7.jpg)
Globalization: Friend or Foe?• If you’re a Japanese hog farmer: Foe• If you’re a Japanese pork consumer: Friend• If you’re a U.S. hog farmer: Friend• Get my point?Is U.S. ag competitive globally? YES
– Grain, beef (grain-fed), pork, poultry (cheapest on earth), dairy
• Two risks:– Increasing U.S. regulations, (cost increases)– Lack of FTA access (no deals)
![Page 8: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/8.jpg)
Free Trade Agreements?• Have fueled U.S. agriculture for decades
– Ag duties among the highest globally; meat duties are highest
• But… of the last 100 FTAs, the U.S. has been a party to 2
• We must do better (seeking, negotiating, enforcing)
• TPP: half of the Japanese beef market is at risk (over the next 10 years)
![Page 9: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/9.jpg)
Source: USDA/FAS
Is China the “Market of the Future?”
1. Mexico2. Canada3. Japan4. China
![Page 10: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/10.jpg)
Source: GTIS, AgriTrends
Is China the “Market of the Future?”
![Page 11: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/11.jpg)
Oh, and one other thing…
![Page 12: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/12.jpg)
Enemies at home, and abroad…
“We think it’s better to price meats earlier in the chain, it’s easier,” - Dr. Maarten Hajer
![Page 13: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/13.jpg)
Global Livestock Industry Must Unite Around a Consistent
Message
“It is socially irresponsible to legislate yield-reducing practices”
“Nearly a billion of our common population is food insecure; now is NOT the time to legislate
regulations that raise costs and reduce supplies”
![Page 14: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/14.jpg)
Pork Market Outlook
• Macro Factors• Global Pork 2017• U.S. Pork 2017
![Page 15: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/15.jpg)
Source: IMF July 2016 Outlook
![Page 16: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/16.jpg)
Source: USDA, Fed Reserve
![Page 17: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/17.jpg)
Source: UN/FAO
![Page 18: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/18.jpg)
Source: UN/FAO
![Page 19: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/19.jpg)
Source: NYMEX, FAO
![Page 20: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/20.jpg)
Source: various sources, Warren Prosser
![Page 21: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/21.jpg)
Global Pork 2017
![Page 22: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/22.jpg)
Global Meat is Diverse & ComplexGlobal meat trade is a complicated web of politics, culture, and economics (in that order!)
– Perishability– Bio-safety– Fragmented markets– Politically sensitive– Culturally diverse
Seoul, Korea – Riots against U.S. beef, June 2008
60 million peasant farmers raise 40% of China’s pigs (half of the worlds pigs in China)
85% of U.S. chicken “paws” are eaten in China (for higher prices than leg quarters)
![Page 23: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/23.jpg)
Source: Various global sources, USDA
![Page 24: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/24.jpg)
Source: USDA, Fed Reserve
Cheaper U.S. Pork = Better Exports?
PEDV USD rally
![Page 25: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/25.jpg)
China Pork• Market still HOT on tight supplies; liquidation
of 2+ mil sows (but not 13 million)• Hog and piglet prices posted RECORD HIGHS• Imports SURGING • Profits above US$170+/head (6 months)
– Expansion occurring– But longer lag than U.S.
• Corn policy adjustments: cheaper corn ahead– 250 mmt (9 bil bu) in storage
![Page 26: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/26.jpg)
China Pork• Data is limited• Big question: Expansion???
China MOAAgriTrends average of Chinese market reports
![Page 27: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/27.jpg)
Source: China Customs
![Page 28: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/28.jpg)
Source: China and Hong Kong customs data, includes variety meats, Agritrends forecasts
![Page 29: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/29.jpg)
Source: BPEX, USDA, U.S. Fed, AgriTrends
![Page 30: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/30.jpg)
Source: BPEX, USDA, U.S. Fed, AgriTrends
![Page 31: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/31.jpg)
Source: BPEX, USDA, U.S. Fed, AgriTrends
![Page 32: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/32.jpg)
U.S. Pork Exports 2017
![Page 33: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/33.jpg)
Source: USDA/ERS, AgriTrends Forecasts
![Page 34: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/34.jpg)
Source: USDA/ERS, AgriTrends Forecasts
![Page 35: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/35.jpg)
Source: WASDE, AgriTrends forecasts
![Page 36: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/36.jpg)
Source: USDA/FAS
![Page 37: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/37.jpg)
How Much is TOO Much?
Source: USDA, WASDE Forecasts
![Page 38: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/38.jpg)
Source: USDA, CME
![Page 39: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/39.jpg)
Global Food Demand
• +78 million people per year (global growth)• Global middle class to rise from 2 billion to
4.9 billion by 2030– Asia driving global food demand– But also, less-developed nations
globally– New opportunities for further-
processed and consumer-ready food products
![Page 40: U.S. Pork in the Global Market and Outlook](https://reader035.vdocuments.site/reader035/viewer/2022062400/588af9a81a28abf8548b5cbf/html5/thumbnails/40.jpg)
Denver, Colorado
40
Thank You
Brett [email protected]
303-803-8716@agritrends
www.globalagritrends.com