Weekly Overview: How Will Brexit Affect the US Pork Market?

 

GLOBAL – US pig market analysts have been discussing the impact that the UK’s exit from the EU might have on the US’s pork market.

In the wake of brexit the US dollar has strengthened against the pound, making US products more expensive.

Steve Meyer and Len Steiner explained that when the dollar becomes stronger suddenly the price of US products goes up, making US pork less competitive relative to other exporting nations.

When the US dollar goes up the US market also becomes more attractive to ship to. The result is a shift in the relative flow of products into the US, ultimately impacting returns of US livestock producers.

Chris Hurt, Extension Economist at Purdue University, said the US only exports a small amount of pork to the EU. In 2015, only 0.2 per cent of US pork exports were destined for EU28 countries.

However, due to the strengthened the US dollar against the Euro, the 19 EU countries using the Euro are now at an immediate price advantage over US pork.

The longer-term economic implications of Brexit may be the most important and could reduce the rate of world economic growth. If Brexit does slow world income growth, that could be negative for global sales of pork, said Mr Hurt.

Following on with our Brexit coverage, the National Farmers Union has held a consultation on what a domestic UK farming policy should look like.

The agreed principles from NFU Council include ensuring the best access to markets in Europe, securing trade deals, preventing lower standard imports and creating an agricultural workers scheme.

In disease news this week, South Africa has reported three more outbreaks of African Swine Fever (ASF).

Reporting for ThePigSite, Glenneis Kriel spoke to the CEO of the South African Pork Producers Association, Simon Streicher, about the outbreaks.

Mr Streicher explained that the outbreaks have not had a big impact on commercial production, it is only affecting small-scale producers.

“Most commercial producers have sound biosecurity measures to prevent an outbreak. Small scale producers, on the other hand, cannot always afford these measurements, which ironically are aimed at protecting their investments,” Mr Streicher said.

ASF has also been reported this week on pig farms in Poland, Ukraine, Russiaand Lithuania.

There has also been another outbreak of Porcine Epidemic Diarrhoea (PED) this week in Huron County, Ontario, Canada.