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Q1 Beef Exports below Last Year’s Pace

15 May 2019

US - For the first quarter of 2019, US beef exports were slightly below last year’s record pace, according to March data released by USDA and compiled by USMEF.

March beef exports totaled 107,655 metric tons (mt), down 4 percent year-over-year, while value fell 2 percent to $678 million. For the first quarter, exports were down 3 percent at 307,306 mt valued at $1.9 billion (down 0.8 percent).

March beef exports were very strong on a per-head basis, with export value per head of fed slaughter averaging $335.81 – up 1 percent from a year ago and the highest since December. The first quarter average was $309.32/head, down 2 percent from a year ago.

March exports accounted for 13.6 percent of total US beef production and 11 percent for muscle cuts only, which was fairly steady with last March. For the first quarter these ratios were 12.9 percent and 10.2 percent,  down from 13.2 percent and 10.7 percent, respectively, a year ago.

Beef exports to Korea still red-hot; Japan cools slightly in March

South Korea continues to be the growth leader for US beef exports, with first quarter volume climbing 8 percent year-over-year to 56,173 mt, while value ($414.2 million) was 13 percent above last year’s record-shattering pace.

US beef has achieved remarkable success in Korea’s traditional retail and restaurant sectors but is also rapidly gaining popularity in outlets such as convenience stores and e-commerce platforms. Recent export growth is not only in the ever-popular short rib category, but also in short plate, briskets, clods and rounds, as end-users recognize the versatility and affordability of high-quality US beef.

Beef exports to Japan were moderately lower than a year ago in March, but still finished the first quarter 2 percent above last year’s pace in volume (74,147 mt) and 5 percent higher in value ($480.4 million). This was fueled by growth in variety meat exports, with the US shipping more tongues and skirt meat to Japan. US beef faces a widening tariff disadvantage in Japan compared to imports from Australia, Canada, New Zealand and Mexico, and the latest tariff reduction for these countries didn’t take effect until 1 April.

"US beef cuts are still subject to a 38.5 percent tariff in Japan while our competitors' rate is nearly one-third lower at 26.6 percent," explained Dan Halstrom, USMEF president and CEO. "This really underscores the urgency of the US-Japan trade negotiations, which must progress quickly if we are going to continue to have success in the leading value market for US beef and pork."

Japan’s tariffs on beef variety meat are lower, but US shipments are subject to a duty of 12.8 percent while competitors pay less than half that rate.

Other first quarter highlights for US beef include:

  • Beef muscle cut exports to Mexico continued to shine, with first quarter volume up 14 percent from a year ago to 35,481 mt and value climbing 16% to $220.7 million. While variety meat exports trended lower year-over-year, combined beef/beef variety meat volume still increased 1 percent to 57,591 mt while value jumped 12 percent to $280.2 million.

  • Exports to Taiwan were 3 percent above last year’s record pace at 13,487 mt, though value slipped 7 percent to $117.8 million. US beef dominates Taiwan’s chilled beef market with nearly 75 percent market share – the highest of any Asian destination.

  • CAFTA-DR markets continue to be an excellent source of growth for US beef exports, with first quarter volume to Central America up 15 percent from a year ago to 3,628 mt and value up 19 percent to $21.2 million. Exports to the Dominican Republic soared 71 percent to 2,345 mt valued at $18.9 million (up 65 percent).

  • Lower exports to Hong Kong and Canada offset some of the first quarter growth in other markets. Exports to Hong Kong trailed last year’s pace by 36 percent in volume (21,304 mt) and 30 percent in value ($177.1 million). Exports to Canada were down 14 percent in both volume (23,199 mt) and value ($143.8 million).

  • US exports to China were up 4 percent from a year ago to 1,723 mt, but this came at lower prices as export value fell 17 percent to $13.2 million. There is tremendous potential in the Chinese market for US beef, but due to China’s restrictive import requirements and retaliatory duties pushing the tariff rate to 37 percent, US prices are significantly higher than the competition. By comparison, most beef suppliers are subject to a 12 percent tariff in China while beef from New Zealand is duty-free and Australian beef pays only a 6 percent rate. Australia’s grain-fed beef exports to China in the first quarter totaled 14,347 mt, up 77 percent year-over-year.

TheCattleSite News Desk



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