SPRING HILL, Tenn. – Most of the focus of U.S. livestock markets in 2023 will be on Japan and China for both beef and pork exports, according to one agricultural economist.

“Japan is a major export destination for both products,” said Andrew P. Griffith, University of Tennessee associate professor of agricultural economics. “But declining economic conditions could slow movement to Japan.

“The continued increase of pork production in China could certainly slow pork exports to that country, and may even influence beef exports to China as more pork is made available domestically, and as beef prices remain elevated,” he added.

Chad Hart, Iowa State University professor of economics, said, “I am watching to see if we can keep up the recent pace in sales.

“For 2022, pork exports fell back to the five-year average,” he said. “Meanwhile, beef exports continue to hold near record highs. I would expect some slippage in export tonnage as we go through 2023 (especially in beef as supplies will be tighter), but higher export prices will offset that loss.”

Derrell Peel, Oklahoma State University professor of agricultural economics, said beef exports are likely to pull back from record levels in 2021-2022: “Pork exports are expected to stabilize, perhaps decreasing slightly in the coming year.”

Griffith said the general economy is probably the biggest factor influencing livestock markets to go along with high wholesale prices.

Hart said the global economy has been scuffling, raising concerns about consumer spending reductions across the globe.

“Shipping and logistical problems continue to hamper marketing chains,” he said. “And COVID-19, especially in China, continues to weigh on the markets.”

Peel said pork production, however, is expected to stabilize or decrease just slightly in 2023 after decreasing in 2022: “Beef production is expected to decrease sharply in the coming year, which will keep beef prices elevated and decrease beef supplies.”

When asked if the strong dollar and global recession threaten U.S. producers, Griffith said the value of the dollar always influences international markets.

“Increasing value of the dollar will slow exports and increase imports, while a lower value dollar will increase exports and slow imports,” he said. “The recession will not only slow exports, but it will also slow the domestic market, which could keep beef prices in check.”

Hart said although these two factors do threaten U.S. producers, the value of the dollar has been moderating recently, and consumers have continued to spend money on meat and protein products, despite higher prices.

“The dollar’s impact depends on the country you’re looking at,” he said. “For example, over the past few months, the dollar has strengthened versus the Japanese yen, and the South Korean won, magnifying the higher prices those countries face to purchase U.S. meat.

“Meanwhile, the dollar has faded versus the Mexican peso, offsetting some of the price increase for Mexican consumers, and making U.S. meat relatively more attractive,” he added.

Peel said the strong U.S. dollar will add additional headwinds to pork and beef exports, although the dollar has moderated some recently.

“Global economic uncertainty has not had large impacts thus far, but remains a threat and concern in the coming year,” he said.

Hart said, “We do see other nations looking to increase their own internal production. For example, China continues to build back up its pork industry (continuing the process of recovering from African Swine Fever).

“But livestock producers in other countries are facing the same challenges as U.S. producers: higher feed costs and extreme weather conditions impacting haying and grazing opportunities,” he added.

Peel said there are no major changes in pork production other than a slight increase in China, “although China has fully recovered pork production from the African swine influenza reductions in 2019-2021. On the beef side, Australia is recovering from drought reductions and will be back in global markets in a bigger way in 2023.”

Griffith said with pork exports down in 2022, “There is a good chance this will continue, considering Mexico is our biggest pork export destination. The tough economic times will likely slow exports to Mexico, while the increased production in China will slow exports to China.”

Hart agreed, saying the trend of lower pork exports will continue, “but price increases will soften the impact.”

Peel said pork exports are expected to stabilize in 2023.

“Pork exports to China (had) declined in 2022 from the dramatically higher African swine influenza levels in 2020/2021,” he said. “Pork exports to China are back to pre-African swine influenza levels.

“Pork exports to Mexico increased in 2022, helping to offset decreases in other markets,” he added. “Mexican pork imports are to be stable at 2022 levels (this) year.”