As the global protein markets face increasing complexities, we’re witnessing significant shifts in supply and demand dynamics across the beef, pork, and poultry sectors. From volatile export sales in the U.S. to China’s declining meat imports, the evolving landscape tells a story of economic headwinds, domestic production surpluses, and geopolitical tensions.
U.S. Export Struggles: Beef and Pork Sales in Flux
In the latest report from the USDA, U.S. beef export sales for 2024 fell to 11,400 metric tons (MT), marking a 31% drop from the previous week. This sharp decline is not just a weekly anomaly—it’s 41% lower than the prior four-week average. South Korea led the pack with 3,200 MT in sales, followed by Mexico (1,900 MT) and Japan (1,500 MT). But it’s clear that the downturn has spurred concern among producers. Even beef exports, which reached 11,800 MT, showed a significant 21% decline, largely driven by reduced shipments to key markets like China, which imported 1,800 MT.
Meanwhile, the U.S. pork market tells a different story. Net pork sales surged by 43% from the previous week to 29,700 MT, driven primarily by Mexico (14,200 MT) and Japan (4,300 MT). Pork exports, however, weren’t immune to challenges. While Mexico remains a solid buyer, accounting for 10,700 MT of the 25,700 MT in total pork exports, other markets such as Japan, China, and Colombia have seen steady declines.
The contrast between pork’s increasing sales and beef’s struggles underscores the importance of market-specific demand. But more broadly, it’s a reflection of global shifts that are rewriting the rules for international protein trade.
China’s Meat Import Slowdown: A New Normal?
Through the first eight months of 2024, China imported 4.40 million metric tons (MMT) of meat—a stark 13.9% drop compared to the same period last year. August imports alone fell by nearly 10% year-over-year, and beef has been hit particularly hard, with July volumes down a staggering 27%.
Several factors are at play here. China’s domestic meat production surged in 2023, providing an ample stockpile that has since reduced the need for imports. In addition, economic pressures have tightened consumer spending, shifting preferences toward cheaper protein options. And with import bans on certain U.S. facilities still in effect, the supply from American producers has faced further constraints.
Yet, while beef imports remain sluggish, pork imports may see a modest uptick as China attempts to offset a forecasted 3% decline in domestic production. However, even this increase is likely to be marginal, with China’s pork output falling by 0.4% in Q1 2024—the first such decline in nearly four years.
Global Impact: Shifting Trade Flows
The ripple effect of China’s declining imports is being felt globally. U.S. meat exports, especially beef, have dropped sharply, while Brazil has ramped up shipments to China, increasing its beef exports by 10.2% in the first half of 2024. Australia, faced with weaker Chinese demand, has redirected its exports toward the U.S. and Japan, both of which remain steady consumers of high-quality beef.
While the trade routes are shifting, the bottom line is clear: China’s reduced appetite for meat is reshaping global protein markets. As the country continues to balance domestic production with its economic slowdown, the rest of the world is adjusting in real time.
National Pork Producers Council (NPPC): An Industry in Need of Solutions
At a recent virtual briefing, NPPC CEO Brian Humphreys laid out the urgent challenges facing the U.S. pork industry. “We’re here to find solutions, not just discuss challenges,” Humphreys said, pointing to the critical need for a 2024 Farm Bill, a legislative fix for California’s Proposition 12, and a robust trade agenda.
Proposition 12 remains a particularly contentious issue. The 2018 California law restricts the sale of pork products not raised under the state’s stringent housing regulations. According to the NPPC, this has placed undue burdens on pork producers outside of California, leading to a 20% increase in pork prices and a 20% decrease in supply. “We cannot continue down this path of unscientific rules and regulations,” Humphreys noted.
Labor shortages also loom large over the industry, as the availability of skilled workers dwindles. Despite some policy changes aimed at streamlining the TN visa program, pork producers have struggled to secure the labor needed to run operations efficiently. As Humphreys put it, “It just seems like every day there’s less and less TNs approved. We’ve been to the State Department, and we’ve been to the White House, but nothing has changed.”
Add to that rising production costs—up 25% over the past three years due to spikes in feed, transportation, and labor costs—and it’s clear the pork industry is facing a perfect storm of challenges.
A Global Perspective: Protein Markets Under Pressure
It’s not just the U.S. and China feeling the squeeze. Across the globe, protein markets are in a state of flux. The U.S. faces export headwinds as China scales back, while Brazil and Australia seek to fill the gap. Domestically, pork producers battle labor shortages, rising costs, and regulatory burdens.
For consumers, the impact is palpable—higher prices at the grocery store and fewer choices. For producers, the challenges are existential, as they navigate the ever-evolving demands of a global protein market in transition.
As we move forward, the big question remains: How will global protein markets adapt to these seismic shifts in supply and demand?