USA, Denver. United States beef and pork exporters sold more meat abroad in March than ever before, generating record sales.
For the full first quarter of 2021, however, the balance sheet does not look as positive compared to last year's very strong performance, especially for pork. While export volumes slumped 6.6%, value fell 7.3%. In contrast, foreign shipments of beef (-0.4%), which barely held their own, earned a 3.3% increase in value.
The US Meat Export Organization (USMEF) recently reported that pork exports, including processed pork, were down 55,300 t, or 6.6%, to 782,820 t in January-March compared to the first quarter of 2020. Still, it was the second-highest first-quarter export volume ever.
US suppliers also had to cut back on revenue, which at the equivalent of about € 1.7 bn. was € 133.6 mill., or 7.3%, below the comparable year-earlier level. The situation was better in the beef sector. Here, although the export volume of 333,350 t was just 0.4% below the tonnage of the first quarter of 2020, higher selling prices gave exporters a 3.3% increase in revenue to almost € 1.75 bn. This was the first time since 2019 that export revenues for beef exceeded those for pork.
"Exports got off to a respectable start in 2021," said USMEF Executive Director Dan Halstrom. He added that this cannot be taken for granted given the continued food sector constraints in many key markets due to the corona and the difficulties in the domestic industry with logistics and operations during times of the pandemic. "Although these obstacles have not yet been fully overcome, the strong March results show that the situation has improved and exports reflect strong global demand for US red meat," Halstrom said. According to him, constrained labor capacity has recently held back exports of processed meat in particular, but the situation is beginning to improve.
About 30% of US pork production was sold cross-border in the first quarter of 2021, according to USMEF, down 1.5 percentage points year-over-year. This is likely related to production falling more than domestic consumption as hog inventories decline. In contrast, a key factor in the January-March decline in US pork exports was that China ordered significantly lower volumes. Exports to the People's Republic, including Hong Kong, were down by just over 60,000 t, or 20.2%, to 236,500 t. The drop in export revenue was even more pronounced at 26.5% to € 437.9 mill.
Although China bought more processed products in the USA, the more expensive pork cuts were increasingly ordered in Spain and Brazil. This could continue in subsequent months, as the sharp rise in the price of slaughter pigs in the USA means that their offer prices for meat are no longer as competitive as they were in 2020. US suppliers also suffered a drop in sales to Mexico, their second most important customer, by 4.3% to 187,000 t. In addition, 6.3% less pork was sold to Canada and 8.8% less to South Korea. By contrast, exports to Japan, the third most important market, rose by 1.3% to 104,800 t. There were large increases in sales to Central America, where the volume shipped rose by almost half to 35,930 t. Pork exports to the Philippines almost tripled to 25,380 t. The government there is seeking to cushion the price increase through increased imports and has reduced import duties from April, which should further boost sales.
In beef, exports as a percentage of US production were virtually unchanged at 14.1% in the first quarter of the year. Japan remained the most important third-country customer with 75,410 t; however, this was nine percent less than in the same quarter last year. In mid-March, Japan increased its import duty on US goods from 25 to 38.5% as the trigger level for preferred shipments was exceeded. South Korea ranked second among the top export destinations for US beef; shipments there increased 7.9% to 69,000 t. Because the South Koreans also ordered more high-priced cuts, export revenues increased by 8.4% to € 414.6 mill., replacing Japan as the most lucrative customer in terms of sales value.
By contrast, business with neighboring Mexico was weak, with sales there down 14% year-on-year to 51,530 t. The situation was quite different in China. While only 1,888 t of beef were shipped there in the first quarter of 2020, the figure for the same period this year was 31,060 t. The share of processed meat was less than 5%, so it was mostly higher-value cuts. The average value of a delivered t was therefore also in the upper range of all supplier countries at around € 6,200. According to USMEF, the trade upswing was made possible because more and more US companies have obtained export permits and Chinese punitive tariffs were lowered last year. US suppliers are also benefiting from the supply lull in Australia and the blocking of exporters there to the Chinese market.