U.S. pork exports to Japan increased significantly in 2020, bolstered by tariff relief provided for in the new U.S.-Japan trade agreement. The deal went into effect on January 1, leveling the playing field with major competitors such as Canada and the European Union. Imports from the United States, Canada, Mexico, Chile and the EU benefited from a further round of tariff cuts on April 1, at the start of Japan’s fiscal year.
In 2019, American pork faced an uphill battle in Japan when the Comprehensive and Progressive Trans-Pacific Partnership and the EU-Japan Economic Partnership Agreement entered into force. This was reflected in our trade data, as pork exports from the United States set new records around the world, but shipments to Japan fell 6% to about 370,000 metric tonnes. The value of exports to Japan also fell 6% to $ 1.52 billion, the lowest in more than 10 years.
“At the time of its signing, I declared that the trade agreement between the United States and Japan was one of the greatest commercial advances in the history of the American red meat industry,” said Dan Halstrom, President and CEO of the US Meat Export Federation. “After six months of the agreement taking effect, that feeling is stronger than ever.”
Exports to Japan have posted a strong first quarter this year and were particularly impressive in April, following the latest round of tariff cuts. Despite temporary disruptions to U.S. factories and other challenges related to COVID-19, April’s exports to Japan climbed 28% year-on-year to more than 39,000 mt, valued at 164.2 million dollars (up 39%). Exports declined in May as interruptions in US production intensified, but January-May volume was still 7% higher than a year ago to just under 170,000 mt. that the value increased 10% to $ 704 million. Japanese import data (also through May) highlights the resurgence of American pork, with an overall market share dropping from 32.5% to 38%.
With restaurant traffic limited due to COVID-19 and out-of-school children for much of this year, Japanese consumers are preparing many more meals at home. American chilled pork was well positioned to meet this need, as were processed products, especially sausages, derived from seasoned American ground pork. Import data from Japan shows a 4% increase in US chilled pork to 88,217 mt. Japan is the largest market for US pork exports on a unit value basis and is the second largest by volume after Mexico. Chilled pork accounts for more than half of total US pork exports to Japan, much of which is a high-value product destined for retail sale.
Win back critical customers with seasoned American ground pork
The main growth driver in 2020 was US seasoned ground pork, with Japanese imports increasing 43% to nearly 50,000 mt, while the value soared 69% to $ 150 million. The US market share in Japanese imports of seasoned ground pork rebounded dramatically to 79%, from 57% from January to May 2019.
“If you want a case study of why a level playing field matters, there is no better example than our exports of seasoned ground pork to Japan,” says Halstrom. “Prior to 2019, imports of seasoned ground pork were subject to a 20% duty. When Canada and the EU obtained tariff relief, US exports were hit hard due to the price disadvantage. Now that we are subject to the same reduced rate as our competitors (now at 10%, dropping to zero in 2023), American seasoned ground pork is regaining market share significantly. “
This rapid rebound in exports of seasoned ground pork to Japan is particularly beneficial from a carcass use perspective, as the most common raw material for this product is boneless picnic. This cut has limited appeal in the domestic market and although it is exported to other destinations, Japan offers exceptional yields.
“Picnics are a key export item for several markets and particularly popular with processors in South Korea, Mexico, Canada and Colombia,” said Halstrom. “But from a value-added perspective, the US industry benefits greatly when we move picnics to Japan in the form of seasoned ground pork. This is a critical customer base for a value-added product that the US industry has spent decades building, and that we just couldn’t afford to lose. “
Connecting with Japanese consumers during COVID-19
As retail demand for red meat has skyrocketed in Japan during the COVID-19 pandemic, the U.S. industry has faced new challenges when presenting products to consumers. The current environment is not conducive to traditional tastings in supermarkets and cooking demonstrations. The USMEF has therefore stepped up its efforts to reach consumers through social media and other online platforms that tout the attributes of American pork.
“Japanese consumers are very tech-savvy, but compared to other Asian markets, they aren’t as inclined to buy food online for pickup or delivery,” said Halstrom. “Most still prefer to shop in person, but right now they spend less time in the store and aren’t as open to face-to-face engagement. So it’s even more important that we communicate effectively online to get American pork to the top of their shopping list. “
For a video update on the Japanese market, visit the USMEF YouTube channel.
Source: US Meat Export Federation, which is solely responsible for the information provided and owns full ownership of this information. Informa Business Media and all of its subsidiaries are not responsible for the content of this information asset.