US: Record Exports Continue in Face of Economy

US - While economic caution flags are flying as we enter the final quarter of 2008, both U.S. beef and pork export levels continued to exceed expectations through the first nine months of the year.
calendar icon 17 November 2008
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U.S. pork exports built on the record set in August, skyrocketing 61 percent in September over totals from a year ago. U.S. pork and variety meat exports for the month totaled 163,055 metric tons (just shy of 360 million pounds) valued at $425.5 million. Year-to-date, pork exports are up 70 percent in volume versus 2007 to 1.5 million metric tons (3.4 billion pounds) valued at $3.6 billion – a 64 percent increase.

Beef plus variety meat exports also maintained their strength through September with monthly exports up 47 percent to 98,640 metric tons (217.5 million pounds) valued at $396 million. For the first nine months of 2008, beef export volume increased 33 percent to 750,916 metric tons (1.65 billion pounds) valued at nearly $2.8 billion, a 45 percent jump.

The January through September beef export totals for 2008 stand at 95 percent of 2003 levels for value and 77 percent of 2003 volume totals. However, September 2008 exports exceeded those of September 2003 by 18 percent in value.

Currency fluctuations and credit issues are affecting the flow of world meat trade, and we will see exports impacted in the final quarter of the year. However, as markets stabilize, demand for U.S. pork and beef should remain strong.

Mexico tops beef markets

Exports to Mexico, the largest U.S. beef market, were up 23 percent in September to 33,409 metric tons (73.6 million pounds) valued at $131.5 million, putting the 2008 volume total up 19 percent over 2007 to 313,144 metric tons (690.4 million pounds) valued at $1.1 billion, a 27 percent increase. Beef and variety meat exports to Mexico peaked in July at 40,930 metric tons (90.2 million pounds – the current record for monthly exports to Mexico). Feeder cattle imports from Mexico are down 43 percent (totaling 496,694 head through Nov. 11) and there is much concern regarding the impact of COOL on Mexican feeder cattle values.

Exports to Canada peaked in May (the latest record at 18,056 metric ton or 39.8 million pounds) but remained 8 percent above year-ago levels in September with exports totaling 12,731 metric tons (28.1 million pounds). January through September exports are up 31 percent to 122,448 metric tons (269.9 million pounds) valued at $574.4 million, up 35 percent. Like Mexico, live cattle trade with Canada has slowed significantly with similar concerns about COOL implications. Year-to-date imports of Canadian cattle are still up 10 percent from last year, with larger slaughter cow and feeder cattle numbers more than offsetting the 21 percent decline in slaughter steer and heifer imports (total: 1.26 million head, of which 167,000 head are slaughter cows and bulls).

Exports to Japan continue to slow from the June peak of 10,146 metric tons (22.4 million pounds), reflecting tighter supplies of cattle under 21 months of age. However, exports in September exceeded last year by 46 percent at 6,230 metric tons (13.7 million pounds) as USMEF continues to promote alternative cuts. Year-to-date volume and value for beef exports to Japan have each increased 62 percent to 57,509 metric tons (126.8 million pounds) valued at $297.2 million. Beef exports to Japan thus far in 2008 equal just 20 percent of 2003 export volume and 29 percent of value. In other words, $736 million in lost opportunity based on January through September 2003 export totals.

Increased buying pressure from Russia further slowed exports to the Middle East in September. While 2008 volume is down 4 percent to 68,672 metric tons (151.4 million pounds), the value of those exports has increased 36 percent to $109 million versus 2007.

Exports to the ASEAN region set another new record in September at 5,706 metric tons (12.6 million pounds) valued at $20 million. This puts January through September volume up 350 percent to 39,720 metric tons (87.6 million pounds) valued at $116.9 million, a 389 percent jump in value. Vietnam leads the region with exports up 495 percent to 29,621 metric tons (65.3 million pounds), followed by the Philippines at 7,223 metric tons (15.9 million pounds – a 180 percent jump) and Indonesia at 1,946 metric tons or 4.3 million pounds, up from virtually zero last year due to market access issues. The continued strength in exports to Vietnam symbolizes the strong demand in the Greater China region and underlines the frustration that the United States still does not have direct access to China for U.S. beef.

Exports to Russia were strong in September at 7,786 metric tons (17.2 million pounds). Of this, 2,038 metric tons (4.5 million pounds) were muscle cuts. Variety meat exports remain strong, while muscle cut exports seem to have peaked in August. Weekly beef export sales data indicates accumulated exports through Nov. 6 at 16,774 metric tons (nearly 37 million pounds), but weekly sales have slowed dramatically since the peak at the end of August.

South Korea continues comeback

Not including variety meat, South Korea was the second-largest destination for U.S. beef exports during September, with exports totaling 16,642 metric tons (36.7 million pounds) valued at $89 million. This volume exceeded exports in September 2003 which totaled 13,431 metric tons (29.6 million pounds). Since beef and beef variety meat exports resumed in mid-July, they have totaled 31,385 metric tons (69.2 million pounds) valued at $162 million. Weekly beef export sales data through Nov. 6 indicates accumulated exports of 45,000 metric tons (99.2 million pounds), with outstanding sales of 16,000 metric tons (35.3 million pounds).

Exports to Taiwan declined dramatically in September to 1,816 metric tons (4 million pounds), down from the peak of 2,856 metric tons (6.3 million pounds) in August, but remained 8 percent above last year’s volume. Total 2008 exports to Taiwan are up 35 percent to 21,204 metric tons (46.7 million pounds) valued at $99 million and are on track to set another record this year.

Exports to the EU continued to climb in September, with volume (excluding variety meat) up 118 percent to 1,745 metric tons (3.8 million pounds) valued at $9.2 million. Year-to-date exports are up 137 percent to 12,687 metric tons (nearly 28 million pounds) valued at $74.9 million, an increase of 175 percent. Again, USMEF cautions that EU import data should be utilized for a more precise estimate of exports of High Quality Beef (HQB) to the EU (under the 11,500 metric ton quota which runs July-June). EU import data show a 160 percent increase in imports from the United States, totaling 2,670 metric tons (5.9 million pounds) in the January through August period. At this pace, the United States will not fill the HQB quota during the current quota year — contrary to the large volumes shown in U.S. export data.

U.S. beef exports to the Caribbean are down 2 percent in volume but up 12 percent in value at 13,538 metric tons (29.8 million pounds) and $54.6 million for the first nine months of 2008. Exports to Jamaica are up 23 percent to 4,097 metric tons (9 million pounds) while exports to the Bahamas are down 19 percent to 2,131 metric tons (4.7 million pounds) and exports to the Dominican Republic are down 9 percent to 1,996 metric tons (4.4 million pounds).

Exports to Central and South America during the January through September period are up 26 percent to 8,390 metric tons (18.5 million pounds), and up 54 percent in value to $18.6 billion. Peru is the leading market with exports up 76 percent to 4,076 metric tons (nearly 9 million pounds), mainly livers. Exports to Guatemala are down 4 percent to 1,384 metric tons (3.1 million pounds) and exports to Costa Rica are down 30 percent to 606 metric tons (1.3 million pounds).

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