Market Pork and beef export volumes strong in July

by Editor fleischwirtschaft.com
Tuesday, September 11, 2018
Photo: USMEF

July exports of US pork and beef were higher than a year ago, according to data released by USDA and compiled by the US Meat Export Federation (USMEF). Export value results were mixed, with beef exports posting another near-record month while pork export value declined, reflecting the impact of retaliatory duties imposed by Mexico and China.

Pork exports totaled 176,413 t in July, up 1.5% from a year ago, valued at $465.3 mill. – down 5% year-over-year and the lowest monthly value since February 2016. For the first seven months of the year, pork exports remained 2% ahead of last year’s record volume pace at 1.45 mill. t, while value was up 3% to $3.83 bn.

“As anticipated, the 20% duty in Mexico and 62% duty in China weigh heavily on the price these exports can command and on the returns generated for producers and for everyone in the supply chain. Buyers outside of Mexico and China have stepped up to purchase our product, but they are capitalizing on a buying opportunity made possible by the higher costs of doing business in Mexico and China,” said USMEF President and CEO Dan Halstrom.

July exports accounted for 24.7% of total pork production and 21.7% for muscle cuts only, down from 25.9% and 21.3%, respectively, last year. For January through July, the percentage of total pork production exported fell from 27.5 to 27%, but for muscle cuts the percentage increased from 22.8 to 23.3%. July pork export value averaged $48.49 per head slaughtered, down 11% from a year ago. Through July, per-head export value was up slightly to $54.27.

Led by South Korea and strong growth in Japan, Taiwan and Latin America, July beef exports climbed 12% in volume to 116,575 t, valued at $722 mill. – up 16% from a year ago and just slightly below the May 2018 record of $722.1 mill. For January through July, beef exports established a record pace in both volume (779,450 t, up 10% year-over-year) and value ($4.76 bn., up 20%).

July exports accounted for 14% of total beef production and 11.8% for muscle cuts only (the highest since December 2016) – each up nearly a full percentage point from a year ago. For January through July, exports accounted for 13.5% of total beef production and 11.1% for muscle cuts – up from 12.8% and 10.1%, respectively, last year. Beef export value averaged $326.18 per head of fed slaughter in July, up 9% from a year ago. Through July, per-head export value was up 16% to $318.31.

The duty rate on most US pork entering Mexico increased from zero to 10% in early June and from 10 to 20% in early July. This took a toll on July exports to Mexico, especially in terms of value. July volume was 56,484 t, down just 4% from a year ago. But pork moved south at lower prices, with value falling 25% to $92 million.

In China, the duty rate on US pork and pork variety meat increased from 12 to 37% on 1 April, and to 62% on 6 July. July exports to the China/Hong Kong region totaled 22,199 t, down 31% from a year ago, while value dropped 19% to $55.9 mill. Pork variety meat volume to China was hit especially hard in July, dropping 49% from a year ago to 7,446 t. For January through July, pork and pork variety exports to China/Hong Kong dropped 22% year-over-year in volume (238,207 t) and 10% in value ($563 mill.) – due in part to the higher duty rates, but also due to an upward trend in China’s domestic pork production.

The July export picture was much brighter in other major markets – including Japan, the leading value destination for US pork. Exports to Japan totaled 31,248 t in July, up 10% from a year ago, while value climbed 6% to $127.2 mill. For January through July, exports to Japan were 1% ahead of last year’s pace in volume (230,315 t) and 2% higher in value ($948.6 mill.). This included a 2% decline in chilled pork exports to 120,288 t, though chilled pork value increased 1% to $580.4 mill.  

US beef exports to Japan hit a post-BSE volume high in July, reaching 31,883 t (up 15% from a year ago) valued at $196.3 mill. (up 12%). For January through July, exports were up 7% in volume (191,237 t) and 12% in value ($1.21 bn.). This included a 4% increase in chilled beef exports to 87,034 t valued at $694.9 mill. (up 13%). U.S. beef has captured 50% of Japan’s chilled import market this year, down slightly from a year ago.

Beef export growth to Korea continued at a remarkable pace in July, with volume up 51% from a year ago to 23,614 t and value soaring 66% to $169.2 mill. This shattered the previous monthly value record of $154.8 mill., set in June 2018. For January through July, exports to Korea jumped 38% to 136,897 t, valued at $971.2 mill. (up 54%). This included a 33% increase in chilled beef exports to 29,923 t, valued at $289.2 mill. (up 45%). US beef has accounted for 58% of Korea’s chilled beef imports this year and 53% of the chilled/frozen total (up from 54% and 47%, respectively, during the same period last year). Australia is expected to trigger its beef safeguard in the coming weeks, resulting in a temporary tariff rate increase agreed to in the Korea-Australia Free Trade Agreement. This could further strengthen momentum for US chilled beef to Korea through the end of this year.

US lamb exports continue to rebound from last year’s low totals as July volume jumped 104% from a year ago to 1,209 t and value increased 46% to $2.17 mill. Through July, lamb exports increased 54% in volume (6,680 t) and 21% in value ($13.44 mill.). While much of this growth is attributable to stronger lamb variety meat demand in Mexico, muscle cut exports trended higher to the Caribbean, the United Arab Emirates, the ASEAN region and Taiwan.

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