Dive Brief:
- The U.S. and Argentina have agreed to a deal allowing American pork to enter the country for the first time since 1992, the White House said in a statement.
- The agreement opens up a potential $10-million-per-year market for the United States, which already is the world's largest pork producer. Argentina has blocked American imports of the meat since 1992, citing animal health concerns.
- The deal makes all fresh, chilled and frozen pork and pork products from United States animals will be eligible for export to Argentina. “Today’s announcement is a big win for American pork producers and proves that President Trump is getting real results for America’s farmers and ranchers,” Vice President Mike Pence said in the statement. “After 25 years of discussions, America’s pork producers will soon be able to export their fine product to Argentina."
Dive Insight:
Exports remain an important way that U.S. farmers and producers are able to expand demand for their products. According to the National Pork Producers Council, exports added $50 to every animal marketed in 2016 — or about 36% of the $140 average value of a hog.
If the U.S. is able to export $10 million more in pork, it would surely be welcomed by the industry as another source of demand for its product. But at the same time, these exports are unlikely to meaningfully move the needle for U.S. pork farmers and processors such as Smithfield Foods and Seaboard Foods. The U.S. Meat Export Federation estimated that the U.S. exported 2.3 million metric tons of pork in 2016, valued at $5.94 billion. USMEF economist Erin Borror told Reuters that in 1991 Argentina brought in 62 metric tons of U.S. cooked/cured pork, worth about $218,000.
"It's not going to be a huge market for us, but it’s important and we’re happy after 20-plus years of knocking on the door and it has opened," Nick Giordano, a spokesman with the National Pork Producers Council, told Reuters. He said the market will formally open by the end of ths year and expects $10 million in sales annually within the next three years.
The resumption of pork shipments to Argentina is not the only market U.S. producers have regained access to in recent months — but the promise has not always translated into as much sales as initially hoped. After China reopened its market earlier this summer to U.S. beef for the first time in 14 years, it has proven difficlt to reignite sales to the communist country. After U.S. beef was shut out of China in 2003 soon after America's first case of mad cow disease was found in Washington state, other countries quickly stepped in to fill the void.
It's uncertain if U.S. pork producers, after being absent from the Argentine market, will struggle to compete with other countries that currently serve the country. But as the National Pork Producers Council noted, it's better to have unfettered access to the country's market than be on the outside looking in wishing you could compete.