Trade prospects may depend more on the economy and international demand, with areas such as politics playing a smaller the role.
Lee Schulz, Extension livestock marketing economist with Iowa State University, says over the near-term, the global economy will dictate trade success or failure.
鈥淥ne of the factors as of late has been the exchange rate,鈥 Schulz says. 鈥淲e have a stronger U.S. dollar, and we also have a strengthening peso which brings more trade from Mexico.鈥
He says over the long-term, both pork and beef exports face some challenges. Schulz says the tight U.S. beef supply could limit trade options, and while the U.S. sow herd has decreased, pigs per litter numbers are up, which indicates more pork should be moving into the pipeline.
Hog prices have been down drastically over the last several months, and Schulz says that likely will continue into 2024.
Foreign customers like the many different cuts of beef and pork the U.S. has to offer, he says. The United States remains the lowest-cost producer in the world, Schulz says, adding the U.S. is also viewed as a reliable producer of high quality meat products.
Schulz recently traveled to China, where it was discussed that China wants to be less reliant on imports, especially soybeans.
鈥淭hey have targets that they want to reach,鈥 he says. 鈥淭hey want to be down by 13% in 2025.鈥
Customers of U.S. beef may be looking at higher prices over the next couple of years, Schulz says, as the industry begins to look at rebuilding cow numbers.
鈥淲e are going to see a drastic decline of beef over the next two years,鈥 he says. 鈥淭his will cause expansion, and we need to make sure that the domestic consumers are getting the beef that they want.鈥
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According to the Foreign Agricultural Service, in 2022 the U.S. was the second largest exporter of beef, behind only Brazil. Over 2023 and 2024, the forecast predicts the U.S. will drop to fourth behind Brazil, Australia and India.
鈥淲e will see imports increase over the next several years as we rebuild our herd here,鈥 Schultz says.
The U.S. will also continue to pursue trade agreements with individual countries, says Scott Brown, Extension livestock marketing economist with the University of Missouri.
He says over the last few years, the U.S. has entered into free trade agreements with countries such as Colombia and the Philippines. He says that has helped move the large volume of pork that has been marketed over the last couple of years.
Brown says from 2002 to 2022, pork production is up 2.8 billion pounds, adding China鈥檚 increase is just 0.60 billion pounds
Brown says everyone else is up 4.1 billion pounds during that 20-year span.
鈥淚t highlights the point about markets more likely to grow outside the U.S. than here,鈥 he says.
He says major markets such as Mexico and Japan should continue to import a good supply of U.S. meat.
Brown says developing new markets helps manage the risk better than relying on two or three larger-volume customers.
鈥淢arket development really takes a long time,鈥 he says.
Brown says politics will also play a role in trade development. He points to current issues in the world involving Israel, Russia and Ukraine, adding that type of thing can throw trade development a curveball.
鈥淲e really have some significant global issues at this time, which makes it hard to predict what we鈥檙e going to do exactly,鈥 he says. 鈥淏ecause of all that, we aren鈥檛 seeing trade on the radar as much as we might normally see.鈥