U.S. Pork Making Gains in South American Markets
Jessica Julca, USMEF South America representative, with U.S. pork in Colombia
By Jessica Julca, U.S. Meat Export Federation South America representative
The South American nation of Colombia naturally has looked to neighboring Chile – one of the world’s top pork exporters – for a steady supply of pork to meet the needs of its nearly 50 million consumers. As recently as 2009, Chile was the dominant pork supplier to Colombia, but the playing field is changing, not only in Colombia but in Chile as well.
A number of factors are driving the explosive growth of U.S. pork exports to both markets, not the least of which is the free trade agreement that the United States and Colombia inked two years ago. That agreement will reduce duties on virtually all U.S. pork products from 30 percent (for fresh and frozen muscle cuts) to zero by 2016.
Among the striking differences between the two South American neighbors is their traditional attitude toward pork. In Chile, a nation of 17 million with a Pacific Ocean coastline that stretches more than half the length of the continent, pork is considered a staple. Per-capita annual pork consumption is a robust 23 kilograms (kg), or more than 50 pounds.
Colombia, on the other hand, has a less well-developed pork industry and a populace nearly triple that of Chile that tends to view pork as a lesser protein option because of health and/or safety concerns. Part of that equation is a lack of confidence in the Colombian government’s oversight of the industry.
U.S. pork has become a wildcard in the equation. Looking back at 2009, the pork import market in these two nations looked like this:
- Chile: total pork import market of 5,593 metric tons (mt) valued at $14 million. Canada had 58.6 percent of the market share in volume and 51.5 percent in value, followed by the United States at 23.8 percent and 19.8 percent, respectively. (Statistics from Global Trade Atlas)
- Colombia: total pork import market of 15,110 mt valued at $24.7 million. Chile led with 45.3 percent of the market share in volume and 39.7 percent in value versus 31.9 percent and 36 percent, respectively, for No. 2 United States.
Fast-forward four years and the pork landscape looked like this at the close of 2013:
- Chile: total pork import market of 38,902 mt valued at nearly $112 million. The United States overtook Canada with 70 percent market share by volume to 12.8 percent for Canada and 57.3 percent when measured by value to 26.1 percent for Canada.
- Colombia: the total pork import market increased to 51,438 mt valued at $135.4 million, of which the United States had a 56.4 percent share in volume and 59.6 percent share in value. Canada and Chile followed in second and third place with roughly 21 percent of the volume and 19 percent of the value for each.
Part of the reason behind the change is the economic growth of both pork markets. While Chile’s appetite for commodity pork has not waned, it has developed a growing interest in value-added products, such as marinated ribs for their barbecues. And the sausage processing industry in both Chile and Colombia rely on imported pork for between 50 and 90 percent of their raw material. Roughly 60 percent of U.S. pork exports to Chile go to the processing sector, while about 50 percent of U.S. pork to Colombia is further processed.
In Colombia, an imaging campaign initiated by the domestic pork industry has helped educate consumers about the safety and wholesomeness of pork, and that has contributed to a 25 percent per-capita pork consumption increase in just the past four years, growing from 4.8 kg (10.5 pounds) per person per year in 2010 to an estimated 6 kg (13.2 pounds) this year – still far below Chile’s 23 kg, but a significant improvement.
Since the majority of U.S. pork to both nations is going behind the scenes to the processing industry, USMEF has utilized Pork Checkoff funding to develop and deliver educational programs for importers and processors. Recently more than 80 pork industry representatives from Chile, Colombia and Peru attended a seminar to learn more about the U.S. pork industry, types of cuts and specifications and other information to build their comfort level with products to fit their business models. Initiatives like this have helped offset the advantage the Chilean pork industry has from zero percent duties on its products.
Yet another area of focus has been partnering with the Colombian government and the USDA Foreign Agriculture Service to hold seminars in three port cities to help train customs inspectors so that the increased volume of pork imports can clear customs in a timely fashion.
The increased visibility of U.S. pork in both markets is playing a role as well as retailers and, to a lesser extent, food service operators, look to capitalize on promotional opportunities made possible with Pork Checkoff and USDA Market Access Program (MAP) funds coordinated through USMEF. Despite political differences, the image of U.S. food products and the USDA stamp is a positive draw – particularly in Colombia – and point-of-sale identification on vacuum-packed cuts, such as St. Louis ribs, clearly shows the origin of U.S. pork products.
At the end of the day, both Chile and Colombia are increasingly important trading partners for the U.S. pork industry. The total Chilean pork import market has grown nearly 600 percent in volume and 700 percent in value since 2009, and the United States’ share of the market has soared more than 16-fold in volume and 22-fold in value (23,091 mt valued at $64.1 million).
As for Colombia, which now ranks as the No. 8 single-country market for U.S. pork exports, the total pork import market has grown 240 percent in volume and 450 percent in value since 2009. The U.S. share of the Colombian market is up just over 500 percent in volume and 725 percent in value (28,987 mt valued at $80.7 million), and in the first two months of 2014 it is up another 151 percent in volume and 155 percent in value over the pace set in 2013.
Working in partnership with the Colombian pork industry to support consumer education will be a key to growing per-capita consumption in that country, while continued introduction of premium and value-added products, such as sausages and prosciutto, will be keys in both markets.