March Beef Export Results Mixed; Pork Exports Trend Lower08 May 2013
US - March exports of US beef were down in volume from a year ago but edged slightly higher in value, while pork exports slumped on lower results in several mainstay markets.
According to statistics released by USDA and compiled by the US Meat Export Federation (USMEF), March beef export volume of 83,612 metric tons (mt) was down 7 per cent from a year ago but export value ($440.7 million) was slightly higher. Beef exports finished the first quarter 4 per cent lower in volume (256,587 mt) but 5 per cent ahead of last year’s record pace in value ($1.3 billion).
March pork exports declined 18 per cent from a year ago in both volume (163,004 mt) and value ($469.5 million), hampered by a beta agonist-related market closure in Russia, larger domestic supplies in China and South Korea and weakened demand in top markets Japan and Mexico. For the first quarter, pork exports fell 12 per cent below last year’s record pace in volume (528,195 mt) and 11 per cent in value ($1.49 billion).
“We are definitely facing a challenging environment in several of our leading markets,” said USMEF President and CEO Philip Seng. “Some of these trends are anticipated, such as the lower demand for exports where domestic production is up and inventories are plentiful. But the trade impasse with Russia is very frustrating because we have lost access to a market where demand for our product is extremely strong. In other destinations we have seen the overall demand for high-quality proteins become sluggish, and USMEF is very focused on reversing this trend.”
March beef exports equated to 9 per cent of US muscle cut production and 12 per cent when adding variety meat – ratios consistent with a year ago. Export value equated to $222.20 per head of fed slaughter, up from 9 per cent in March 2012. First quarter export value was $221, also an increase of 9 per cent.
Pork exports accounted for 20 per cent of muscle cut production in March and 23.4 per cent including variety meat. This is down from 24 per cent and 27.8 per cent, respectively, in March 2012. March export value equated to $50.38 per head, down from $59.92 in March 2012. First-quarter export value averaged $53.38 per head, down 10 per cent from a year ago.
Expanded access boosts beef exports to Japan, Hong Kong
Beef exports to Japan received an excellent bounce from aggressive promotional campaigns designed to capitalize on the recently expanded market access. March volume (18,565 mt) was nearly 80 per cent higher than a year ago and value was up 62 per cent to $114.2 million. This pushed first-quarter exports to Japan 30 per cent higher in both volume (38,483 mt) and value ($252.1 million).
Japan ranks second in beef export value to Canada, where US exports also posted an outstanding first quarter. Export volume to Canada increased 20 per cent to 44,305 mt while value was up 32 per cent to $284.2 million. This made Canada the leading volume and value destination for US beef.
Beef exports to Hong Kong more than doubled in volume in the first quarter to 22,217 mt, while value increased 93 per cent to 123.4 million. Market access was also expanded in Hong Kong in late February, when the market began accepting bone-in cuts from US cattle less than 30 months of age and boneless cuts from cattle of all ages.
Another bright spot for the US beef industry has been the steady recovery of exports to Taiwan, which slumped in late 2011 and much of 2012 due to controversy over Taiwan’s beta agonist policy. With more workable regulations now in place, exports to Taiwan posted their best-ever first-quarter performance with volume increasing 56 per cent to 8,669 mt and value up 88 per cent to $66.1 million.
Beef exports to the Middle East also recorded the best first quarter ever in terms of volume, increasing 10 per cent to 39,018 mt. Export value ($75.7 million) slipped 4 per cent due in part to the continued lack of access to Saudi Arabia, which closed to US beef following the April 2012 BSE case.
As mentioned previously, red meat trade with Russia has been effectively shut down since early February. First quarter beef exports were down 87 per cent in volume (1,858 mt) and 96 per cent in value ($2.3 million). Exports to former No. 1 market Mexico continue to struggle, with first-quarter results down 27 per cent in volume (40,668 mt) and 29 per cent in value ($177.1 million). Mexico now ranks second in export volume to Canada and third in value behind Canada and Japan.
Slowdown in key markets hampers pork exports
Coming off a record year in which pork exports to Japan reached nearly $2 billion and export value to Mexico topped $1.1 billion, demand in both markets has slowed in 2013. Along with the shutdown of the Russian market – ranked No. 6 in export value last year at $281.7 million – this hindered US pork’s global performance in the first quarter despite gains in smaller, emerging markets.
Compared to the first quarter of 2012, pork exports to Japan fell 12 per cent in volume (108,313 mt) and 9 per cent in value ($482.5 million), partially as a result of the weaker yen. Exports to Mexico declined 15 per cent in volume (137,506 mt) and 16 per cent in value ($252.8 million).
Exports to Russia were down 62 per cent in both volume (5,646 mt) and value ($17.5 million). Larger exports to neighboring countries, especially Ukraine, helped the overall performance in the Greater Russia region but exports were still down 41 per cent in volume (9,221 mt) and 44 per cent in value ($27.1 million).
Large domestic inventories impacted pork exports to China/Hong Kong (104,109 mt, -10 per cent, valued at $219.5 million, -7 per cent) and South Korea (34,841 mt, -35 per cent, valued at $96.1 million, -38 per cent). China’s domestic pork prices recently dropped to the lowest level in more than two years despite a stockpiling program aimed at stabilizing the market. A voluntary herd-culling program initiated by the Korean government in an effort to boost domestic prices has also yielded disappointing results, creating a difficult environment for imported pork from all sources. According to the Global Trade Atlas, Korea’s total pork imports fell 27 per cent in volume and 35 per cent in value in the first quarter. Despite the decline in imports from the United States, US market share has increased in 2013.
Pork exports to several Western Hemisphere markets posted positive first-quarter results. Examples include:
- Exports to Canada increased 4 per cent in volume to 58,162 mt and 3 per cent in value to $205.3 million.
- Bolstered by the recently implemented free trade agreement, exports to Colombia jumped 57 per cent in volume to 5,325 mt and 45 per cent in value to $13.7 million. It was the leading volume market in the Central-South America region, where exports increased 16 per cent in volume (23,843 mt) and 12 per cent in value ($59.9 million). Chile was the region’s leading value market at $14.1 million (+15 per cent).
- Exports to the Dominican Republic increased 9 per cent in volume to 3,795 mt and 16 per cent in value to $9 million.
Asia’s first-quarter bright spot was the ASEAN region, where exports increased 37 per cent in volume to 14,408 mt and 29 per cent in value to $35.5 million. This was driven in large part by outstanding performance in the Philippines, where export volume increased 57 per cent to 11,739 mt, valued at $28.1 million (+44 per cent).
US lamb exports bolstered by strong demand for variety meat
First-quarter lamb exports posted a 16 per cent gain in value ($7.4 million) despite a 5 per cent decline in volume (3,132 mt). Exports to leading market Mexico declined slightly in volume (2,364 mt) but increased 27 per cent in value to $4.1 million. Global exports of lamb variety meat, a key contributor to carcass value, increased 19 per cent in volume (2,161 mt) and 43 per cent in value ($2.9 million).
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