Export Issues & World Markets - Becca Hendricks, National Pork Board, Dr. Paul Sundberg, National Pork Board, Laurie Hueneke, National Pork Producers Council, Dr. Dermot Hayes, Iowa State University, from the 2013 World Pork Expo, June 5 - 7, 2013, Des Moines, IA, USA. More presentations at http://www.swinecast.com/2013-world-pork-expo

1. US Pork Exports
Becca Hendricks
AVP International Marketing,
National Pork Board

3. Exports Share of Production
• 23.4% of U.S. Pork (muscle cuts only)
• 27% of U.S. Pork and Pork Variety Meats
Source: USDA *includes sausage casings

4. CI #2: Enhanced DemandCI #2: Enhanced Demand
0
150,000
450,000
750,000
1,050,000
1,350,000
1,650,000
1,950,000
2,250,000
Metric Tons
Canada FTA
NAFTA
(Mexico)
WTO Uruguay Round
(Japan & South Korea)
U.S.-Taiwan
Pork Deal
China
WTO Accession
Russia Pork
TRQs
Australia
FTA
DR -CAFTA
U.S. - Korea
U.S. -Colombia
U.S. - Panama
Importance of Free Trade

5. 2012 Year-end Pork Exports – A New Record
• $6.3 Billion
– ↑3.5%
• 4.987 Billion lbs
– Up slightly
Source: USDA statistics compiled by USMEF

6. 1st Quarter 2013 Exports
• $1.488 Billion
– ↓11% from Q1 2012
• 1.164 Billion pounds
– ↓12% from Q1 2012
• $55/head in value
Source: USDA statistics compiled by USMEF 2013

7. Partners in International Trade
• National Pork Board
• National Pork Producers Council
• US Meat Export Federation
• State Pork Associations

8. Serving Trade Partners
• Consistent, high-quality, nutrient-dense meats
• Unparalleled food safety history
• Reliable, versatile supply
• Market development & education support
• Transparent, responsible production methods
• Producer/packer/government commitment &
collaboration

9. Trade Access
Laurie Hueneke
Director of International Trade Policy,
National Pork Producers Council

10. US Pork Industry Trade Policy
• National Pork Producers Council = advocacy arm of the US pork
industry which sets domestic and international policy
• Use science-based trade & impact to producers bottom
line/economics to guide policy setting decision-making
– Work with subject-matter experts, other industry groups
• Many countries erect artificial or unscientific barriers to trade
called non-tariff trade barriers or ‘sanitary and phytosanitary’
(SPS) barriers
– Examples: PRRS restrictions, trichinae mitigation
– Violates rules agreed upon as part of the global trade
agreement

11. • Asia-Pacific region free trade agreement (FTA) negotiation
• 11 countries—Australia, Brunei, Canada, Chile, Mexico,
New Zealand, Peru, Singapore, USA, Vietnam
• Japan’s (almost official) joining TPP is a game changer
• Most important FTA the US has ever negotiated thus far
• Goal: Removal of all tariff and non-tariff barriers
• Major payout is resolving sanitary and phytosanitary (SPS)
barriers
• Aim to reach an agreement by fall 2013, but that will be
difficult as many issues still remain outstanding
Trans-Pacific Partnership (TPP)

12. Transatlantic Trade & Investment
Partnership (TTIP)
• Free trade negotiations between the US & 27-member
European Union
• Negotiations likely to start summer 2013
• NPPC leading lobbying effort
• Major barriers to US pork exports
– Tariff rate quota (TRQ) smaller than Uruguay Round
minimum access
– Ban on ractopamine
– Trichinae mitigation requirements
– Prohibition on pathogen reduction treatments (PRTs)
– Plant approvals

13. • Russia
• Implemented complete ban on imports of US pork, beef and turkey Feb. 11
• No science-based reason
• In December, Russia announced it would require pork imports from the US
to show documentation that the pork does not contain ractopamine
residues (Paylean)
• NPPC working w/ US government to reopen market for ractopamine-free
product
• China
• Issued a statement asking for third party verification that US pork exports
contain no ractopamine residues
• Already had ban on ractopamine
• Lots of volatility and uncertainty
Russia & China

14. Trichinae
Countries with Trichinae Restrictions:
• Albania
• Argentina (unofficial)
• Barbados
• Belarus
• Brazil (unofficial)
• Chile
• Croatia
• Colombia (lifted soon)
• Dominica
• European Union
• India
• Kazakhstan
• Macedonia
• Peru
• Russia
• Serbia (no export
certificate)
• Singapore
• South Africa
• Ukraine
• Venezuela

15. Impact of Trichinae Restrictions
on US Pork Exports
Dermot Hayes
Iowa State
University, Tra
de Consultant to NPB and NPPC

16. Overview
• Costs associated with trichinae certification for both
chilled and frozen pork
• Chilled and frozen pork markets, shelf life issues and
consumer preferences
• How chilled and frozen pork is processed and sold
• Economic costs of certification
• Country specific data

17. Certifying Frozen Pork
• Example: A customer asks to buy frozen picnics that
are trichinae certified
• The USDA will provide cert if it can make sure that
time/temp conditions met, this requires monitoring
• A third party will handle freezing and paperwork for
$0.06-0.10 per pound
• A special label is then used to identify the boxes that
contain the certified picnics
• This is added to the capital costs associated with the
ownership of the meat

18. Testing Fresh or Chilled Pork
• Example: A customer asks for chilled picnics with trichinae cert
• Plant identifies a group of animals for testing so guaranteed enough
picnics
• The animals are slaughtered and processed separately from other animals
• Sample taken from diaphragm of each of the animals and sent for testing
• The lab combines a group of 100 samples and searches for trichinae
larvae, if the sample is free then the carcasses are certified
• Lab cost is $0.01 per pound of carcass. Paperwork and segregation costs
equal $0.02 to $0.04 per pound depending on the facility, (larger facilities
have higher costs), industry average is $0.044 per pound
• Picnics sent to the customer and the rest of carcass sold to customers that
do not require a cert

19. Markets for Chilled and Frozen Pork
• In general, importing retail consumers prefer chilled pork
and processors prefer frozen pork
• Because of limited shelf life, chilled pork can only be sold
to countries where shipping time and customs clearance
make it feasible
• Countries that currently import chilled US pork include
Japan, Mexico, Canada, Taiwan and South Korea
• In theory, US can export chilled pork to the
EU, Russia, China and all of Central and South America

20. Markets Where Frozen
Requirement is the Barrier
• Kazakhstan, Singapore, South Africa, Ukraine
• EU and Canada can provide pork to these markets
without additional $0.10 per pound cost
• Importers prefer spot purchases from these
sources rather than the paperwork and capital
costs and time associated with the US system,
this further erodes the US costs advantage

21. Singapore
Partner Country Unit
Quantity % Share % Change
2012/20112010 2011 2012 2010 2011 2012
World T 72,361 65,994 72,055 100.00 100.00 100.00 9.18
Brazil T 26,962 22,565 26,993 37.26 34.19 37.46 19.63
Netherlands T 8,088 8,991 10,932 11.18 13.62 15.17 21.60
Australia T 12,898 11,298 9,147 17.82 17.12 12.69 - 19.04
United States T 8,055 7,461 7,378 11.13 11.31 10.24 - 1.11
France T 3,555 3,771 3,080 4.91 5.71 4.27 - 18.33
Denmark T 2,222 2,091 2,522 3.07 3.17 3.50 20.59
Spain T 396 1,294 2,466 0.55 1.96 3.42 90.65
Canada T 4,551 2,043 2,281 6.29 3.10 3.17 11.65
Germany T 1,199 1,132 1,942 1.66 1.71 2.69 71.57

22. South Africa
Partner Country Unit
Quantity % Share % Change
2012/20112010 2011 2012 2010 2011 2012
World T 26,105 32,079 32,951 100.00 100.00 100.00 2.72
Germany T 11,083 15,896 13,304 42.45 49.55 40.38 - 16.30
Canada T 5,816 7,831 8,135 22.28 24.41 24.69 3.89
Spain T 1,985 2,677 4,760 7.60 8.35 14.44 77.79
France T 3,013 2,192 1,999 11.54 6.83 6.07 - 8.82
United Kingdom T 50 23 1,268 0.19 0.07 3.85 5413.05
Denmark T 889 278 976 3.41 0.87 2.96 251.77
Belgium T 1,423 1,037 803 5.45 3.23 2.44 - 22.54
Ireland T 1,541 1,063 797 5.90 3.31 2.42 - 24.96
Netherlands T 0 75 312 0.00 0.23 0.95 316.62
Hungary T 99 760 300 0.38 2.37 0.91 - 60.56
United States T 25 80 244 0.10 0.25 0.74 204.58

23. Markets Where Chilled
Requirement is the Barrier
• Argentina (unofficial), Brazil (unofficial), Chile, Cuba, Colombia (may
soon be removed), Dominica, EU, Peru, Russia
• Suppose that picnics account for one tenth of the carcass value
then the effective barrier is $0.044 per pound multiplied by 10!
• Need to request the certificate before the animal is slaughtered
also imposes a cost because spot sales are prohibited (the largest
US pork exporter to Mexico does not slaughter any
animals), elimination of spot sales is worth about $0.10 per pound
• Total cost of this system effectively keeps us out of the chilled
market in the countries listed above
• US has a competitive advantage in many of these countries as is
evidenced by market share in frozen product

24. Colombia
Partner Country Unit
Quantity % Share
% Change
2012/2011
2010 2011 2012 2010 2011 2012
World T 8,082 16,354 26,818 100.00 100.00 100.00 63.98
United States T 3,211 7,779 13,611 39.73 47.56 50.75 74.98
Chile T 2,250 3,879 6,765 27.83 23.72 25.22 74.41
Canada T 2,622 4,697 6,417 32.44 28.72 23.93 36.62
China T 0 0 25 0.00 0.00 0.09 0.00

25. Summary
• Trichinae certification reduces our market share for
frozen pork in all countries
• Trichinae testing reduces market share or eliminates US
from competition in potential chilled pork markets
• This report puts a value on this problem
• Solutions:
– Elimination of the import requirement based on USDA
designation and scientific evidence
– Bring US pork industry practices and regulatory
infrastructure in line with OIE standards

26. Global Outreach-Trichinae
• USDA, NPPC and NPB developed position statement which
was used to provide the US/global position
• Outreach conducted to Central and South American country
pork producer groups, reached out to their veterinary
authorities
• Results of OIE Code Commission:
– Text for combination of audits and surveillance but neither separately
– Consistent with an EU perspective
• Adopted in May but agreed to remain amendable
• OIE agreed to continue to work on a system for national
trichinae negligible risk status

27. Next Steps
• Harmonizing OIE standards and US commercial industry's
status will maintain trichinae standing
• Pork organizations will continue to interact with OIE
standard setting on behalf of US pork producers
– More work to be done to gain negligible risk status
– Open new opportunities for chilled U.S. pork
– Full benefits won’t be realized for years…laying
groundwork

28. Your Role to Ensure Continued Safe
Food, Animal Health and Market Access
• Trichinae prevention SOPs will also protect herd health!
– Work with your veterinarian
– Participate in PQA Plus and implement GPPs
– Strict biosecurity
– Strict rodent control

29. Questions?