US Pork Outlook - September 2010
Pig prices are expected to be supported by lower pork supplies and respectable consumer demand for pork products for the rest of this year, according to Rachel J. Johnson in the latest Livestock, Dairy, and Poultry Outlook from the USDA's Economic Research Service.
Summary
For the balance of 2010, hog prices are expected to be supported by lower pork supplies and respectable consumer demand for pork products. The third-quarter price of live equivalent 51-52 per cent lean hogs is expected to average $59-$60 per hundredweight (cwt). Prices are expected to average $51-$53 per cwt in the fourth quarter. The Quarterly Hogs and Pigs report will be issued by USDA/NASS on 24 September 2010.
US Variety Meat Exports and the Global Marketplace
Variety meats may not make up the ‘heart’ of the US meat industry, given that dishes such as beef tongue or pig heart do not typically grace American dinner tables, write Daniel L. Marti and Rachel J. Johnson. In fact, these and other variety meats are often considered to be inferior food in US markets. Nonetheless, variety meat from beef and pork slaughter is important to the bottom line of the US meat industry. This is evident in both the value that variety meat adds to the US meat industry and the volume of sales into the variety meat channel.
Animal by-products are items produced as a result of animal slaughter and include portions of the entire animal that are not part of the dressed carcass. In the United States, animal by-products fall into two categories: edible and inedible offal. Variety meats are a subcategory of edible offal consisting of the liver, heart, tongue, tail, kidney, brain, sweetbreads (thymus and/or pancreas gland, depending on animal’s age), tripe (stomach), chitlings and natural casings (intestines), fries (testicles), rinds, head meat, lips, fats and other trimmings and blood (Ockerman and Hansen, 1998). Some edible offal is also used to make gelatin, sausage casings and rennin used in cheese-making. These products are all part of the US meat industry, but just how important are they?
The supply of edible offal produced in the United States is relatively large in comparison with its domestic demand. US demand for edible offal stems from consumption of products such as sausages and hot dogs and the use of variety meats in pet food. The remainder is available for shipment to foreign markets where they are more highly valued. While carcasses and high-value cuts comprise the majority of total red meat exports, edible offal exports have constituted about 22 per cent of the volume of total beef- and pork-product exports over the last five years. The United States has historically been the world’s largest exporter of beef and pork edible offal, accounting for more than 18 per cent of total world exports over the last 10 years (Figure 1). US pork edible offal exports were nearly 20 per cent of total pork exports in 2009, and over 24 per cent of total US beef exports last year were edible offal.
Variety meats in some countries are considered delicacies, while in other countries, their consumption is associated with low incomes (Halstead, 1999). However, in many regions variety meats are the basis of traditional flavors. Demand for variety meats is especially strong in many Asian nations. In China, most recipes call for sharp-tasting variety meats, not muscle cuts, which are considered bland (Hayes, 1997); cow tongues are considered expensive delicacies in Japan; sliced beef feet are used for soup in South Korea; and stomachs, lungs, and livers are highly valued meats in Colombia (Bean, 1996). Tongue and liver are used in many Mexican dishes, such as putzaze (tripe and liver with tomatoes), lengua (tongue with green chilies) and menudo norteña (tripe soup). However, in Russia, one of the world’s largest offal importers, variety meats are connected to lower incomes and used as an inexpensive way to obtain protein and nutrition (Kamenski, 2006).
Pork variety meat exports and markets
Mexico is by far the largest importer of US pork variety meats, accounting for 46 per cent over the last decade (Figure 2). Other major destinations of US exports include Hong Kong/China, Russia, Japan and South Korea. However, many of these markets have developed only in recent years. Since 2008, Hong Kong/China has begun to rival Mexico as the number one export market for US pork variety meats in terms of volume. In this study, Hong Kong and China are considered as one export destination because much of the US product is transshipped from Hong Kong to China (Bean, 1996). Until 2007, exports of all US variety meats to Hong Kong/China were marginal but last year, US exports of pork variety meat to Hong Kong/China jumped to almost 123,000 metric tons (MT), 32 per cent of all US pork variety meat exports.
Major US pork variety meat exports over the last five years include hog feet (14 per cent of US pork offal exports), fresh or chilled offal (11 per cent), rinds (10 per cent) and all other frozen offal (56 per cent) (Figure 3). In terms of the destinations for these products, Mexico imported over 94 per cent of all US-exported pork rinds and 76 per cent of US fresh or chilled pork offal exports, Russia was by far the largest purchaser of US hog liver exports in 2009, and Hong Kong/China also was the number one importer of US hog feet, pig tongues and pig-heart exports last year.
Looking ahead
Protein intake is often dependent upon income, as are the types of proteins consumed. Increasing per-capita incomes and rising GDP may have varied affects on consumption and trade of variety meats, depending on how the products are viewed in each country.
In countries such as Egypt and Japan, where certain variety meats are more highly valued, increasing wealth and GDP growth may result in increased US variety meat exports. Egyptian demand should remain strong since the country has a younger population, a relatively high rate of economic growth compared with world growth, and a limited capacity to expand domestic production, factors likely to support growth in demand for beef products (Kamenski, 2006). As incomes rise in other countries, certain variety meats may begin to be viewed as inferior goods, which may cause US variety meat exports to decline in some segments of these markets. In portions of the Mexican, Russian and Chinese markets, for example, variety meat consumption may give way to increasing consumption of muscle cuts as tastes and preferences change. However, preferences in other countries for certain culinary traditions – which are strongly tied to variety meat use – will continue to play an integral role in demand for US variety meat exports.
