The United States exports only tiny amounts of pork to the EU but still may feel the impact of Britain’s decision to leave the 28-nation bloc. In the financial turmoil that has followed the vote, the value of the U.S. dollar has risen against the Euro, putting U.S. pork at a disadvantage on the world market, says Purdue economist Chris Hurt.
“Said another way, Brexit gives our biggest global pork competitor a sizable and immediate price advantage,” says Hurt, writing on the farmdoc Daily blog. “The 28 member countries in the European Union have been the largest exporters of pork in the world for the last two years.” One-fifth of U.S. pork is exported, with this year’s sales forecast for 5.2 billion pounds.
Hurt said the two largest factors in demand for U.S. pork at present are Brexit and “the question of how much pork the Chinese will purchase this summer and how long their internal pork shortage will continue … 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 and other U.S. agricultural products.”