Capital Update — For the Week Ending January 13, 2023
Groups Want North American Ag Trade Strengthened
What happened: NPPC this week joined 16 other agricultural organizations in asking representatives of the United States, Canada, and Mexico at the North American Leaders Summit in Mexico City to strengthen North American trade in agricultural products through the U.S.-Mexico-Canada Agreement (USMCA).
In a statement issued the day of the meeting, the U.S. agricultural groups said the USMCA “provides the world’s best framework” for implementing science- and risk-based policies to promote the adoption of “technology that advances food security, agricultural sustainability and rural prosperity and [to] foster a variety of cost-effective food choices for our consumers.”
The organizations urged the three countries to use USMCA committees to “share and align on best practices and to ensure differences are addressed in a timely manner.” They also asked that agriculture-related trade disputes, such as Mexico’s proposed ban on biotech corn and other agricultural technologies, be resolved quickly.
Why it matters: Because of the robust agricultural trade among the United States, Canada and Mexico — initially fostered by the 1994 North American Free Trade Agreement (NAFTA) and sustained through the USMCA — trade in agricultural products in North America rose from $7.7 billion in 1994 to $67.1 billion in 2021, a nearly 770% increase.
The three countries have the largest trilateral agricultural trade relationship in the world, positioning North America as a critical region for supporting global food security. Mexico and Canada are the number two and number four export markets, respectively, for the U.S. pork industry. From 1993, the year before NAFTA was implemented, to 2021, U.S. pork exports to Mexico increased 20-fold, from just 98 million pounds to nearly 2 billion pounds, and exports to Canada went from 36.4 million pounds to almost 500 million pounds. The United States exported $1.675 billion of pork to Mexico and $952.3 million to Canada in 2021.
Learn more: Read the agricultural organizations’ statement here.
U.S. Pork Exports Jump Up in November
What happened: November U.S. pork exports were the largest of the year, and pork shipments in 2022 through November reached nearly $7 billion, with more than 2.4 million metric tons sent to foreign destinations, according to data released last week by the U.S. Department of Agriculture.
While that was 7% less in value and 10% lower in volume compared with the same 11-month period in 2021, the monthly figures showed exports in November continued their upward trend. November exports were up about 7% in volume at more than 254,000 metric tons and 5% in value at more than $733 million over October’s numbers, which were the largest amounts since mid-2021. Pork exports for 2022 through November represented 27.2% of total U.S. production, down from 29.4% a year ago.
Destinations for U.S. pork: With issues related to supply chains continuing, lingering effects of COVID-19 and a strong U.S. dollar weighing them down, pork exports overall were lower to most of America’s top 10 markets, with Japan, China and Canada down 11%, 24% and 9% in value, respectively. Those drops were partially offset by increases in exports to Mexico, South Korea, and the Dominican Republic.
Mexico took nearly 88,000 metric tons of U.S. pork valued at more than $210 million in November – both record amounts – bringing the totals for the year through November to more than 869,500 metric tons and $1.84 billion of U.S. pork. Those amounts were 9% and 20% higher, respectively, compared with the same period in 2021. South Korea increased its U.S. pork shipments by 11%, importing about $560 million worth compared with just under $504 million last year through November. The Dominican Republic, which is battling African swine fever, saw a 48% increase in U.S. pork imports, taking nearly $204 million of product in the first 11 months of 2022.
What it means for producers: For pork producers, exports in November added $66.43 to the value of each hog marketed, up 12% from a year ago. That made the January-November average $60.77 per head, down 4% from the same 11-month period last year.
NPPC Congratulates Doug McKalip on Being Sworn In
What happened: Doug McKalip was sworn in as United States Trade Representative Chief Agricultural Trade Negotiator this week.
NPPC applauded the inaugural ceremony with a public congratulatory statement.
Why it matters: American agriculture needs experienced leaders representing the United States in international negotiations. NPPC looks forward to working with them and their teams to maintain and expand export markets for American pork producers.
Agriculture Listening Session Held at Pennsylvania Farm Show
What is happening: Congressman Glenn “GT” Thompson hosted a public forum at the Pennsylvania Farm Show in Harrisburg today. Attendees had the opportunity to hear from a diverse panel of stakeholders who represent almost every facet of agriculture. Participants highlighted the importance of the Farm Bill and how it directly impacts their sector of agriculture.
Why does it matter? The Farm Bill legislative package is updated every five years, and the last bill was approved in 2018. With the current law set to expire on Sept. 30, 2023, lawmakers are preparing to draft new measures affecting agriculture, rural, and nutrition programs. For NPPC, the 2023 Farm will be an opportunity to renew and expand key Farm Bill programs that protect the pork industry.
NPPC’s take: The Farm Bill serves as key legislation for important programs that protect pigs from foreign animal diseases, including the foot and mouth disease vaccine bank, the National Animal Health Laboratory Network and the National Animal Disease Preparedness and Response Program.
There is also currently no program in place to protect livestock producers from a low-probability catastrophic event that could cut off export access, cause an extreme shortage of feed inputs, dramatically restrict packing capacity, or otherwise lead to devastating producer losses. NPPC supports a USDA-subsidized basic insurance program at $1/pig to protect farmers from low-probability, catastrophic events.
NPPC looks forward to working with all stakeholders on securing a strong Farm Bill that will support livestock agriculture.
Learn more here.