US Red Meat Defies Economic Downturn

US - With key global markets experiencing sluggish consumer spending, volatile currencies and persistent economic uncertainty, many analysts have been predicting a downturn for U.S. beef and pork exports.
calendar icon 16 March 2009
clock icon 4 minute read

The January export results, however, defied those expectations as beef muscle cut exports jumped 13 per cent in volume (43,949 metric tons or 96.9 million pounds) and 15 per cent in value (to $186.5 million) compared to January 2008. Because beef variety meat exports declined in both volume and value, total beef plus beef variety meat exports were up 4 per cent in value to $233 million, and essentially held even with January 2008 in terms of volume at 66,457 metric tons (146.5 million pounds). 

“The increase in beef muscle cut exports is very gratifying, especially in the face of so much economic uncertainty,” said USMEF President and CEO Philip Seng. “Even with overseas consumers constricting their spending in many areas, they recognize the quality, consistency and affordable value delivered by U.S. beef. That is one of the main reasons USMEF is intensifying promotions in sectors with the greatest propensity for utilizing U.S. beef under adverse economic circumstances.”

January pork exports also achieved very solid results, but with an increase in variety meat leading the way. Pork muscle cut exports declined by 4 per cent in volume (to 112,417 metric tons or 247.8 million pounds) compared to January 2008, but increased by 2 per cent in value to $295.8 million. Pork variety meat surged by 46 per cent in volume (to 44,233 metric tons or 97.5 million pounds) and by 44 per cent in value to $64.4 million. This resulted in total pork plus pork variety meat exports of 156,650 metric tons (345.3 million pounds) valued at $360.2 million – an increase of 6 per cent in volume and 8 per cent in value over January 2008.

Seng said the January pork export results were also impressive, especially when compared to the unprecedented export levels of 2008.

“We all know that 2008 – especially the first half of the year – was an exceptional accomplishment for pork exports,” he said. “While 2008 was an all-time high for both volume and value of U.S. pork exports, circumstances have changed dramatically in some key markets and matching those results will be a significant challenge. But I’m pleased to see we were able to achieve positive growth in January, due in large part to our strong sales of variety meat.

“We anticipated a decline in pork demand in China, Russia and some other key markets,” Seng added. “So stepping up USMEF’s marketing efforts for U.S pork in other regions of the world has been very important, and it is clearly paying dividends.”  

Seng noted that with regard to both beef and pork, USMEF’s international teams have refocused their efforts on market niches that offer a more immediate return on investment – as opposed to some long-range educational programs – in order to help offset the projections for lower global protein consumption driven by the economic downturn.

U.S. Beef Sales Slower in Neighboring Markets, but Surging in Asia

Despite a decline in exports to both countries, Mexico and Canada remained the top two destinations for U.S. beef in January, combining to account for 56 per cent of the value and 54 per cent of the volume worldwide. South Korea, which was closed to U.S. beef during the first half of 2008, emerged as the third-largest market in January. Korea’s imports, valued at $27.6 million, were about 20 per cent higher than its December 2008 total. Vietnam was the fourth-largest market in terms of volume (5,636 metric tons or 12.4 million pounds), and fifth-largest in terms of value at $19.9 million. In fact, Vietnam was the pacesetter for the ASEAN region as it set an all-time monthly record for U.S. beef exports.

Japan stood in fourth place for beef exports in terms of value ($21.8 million) and fifth place in terms of volume (4,069 metric tons or about 9 million pounds). This represents an increase of 27 per cent in value and 31 per cent in volume over January 2008.

“With all sectors of the U.S. beef industry working together, we’ve been successful in steadily increasing our beef market share in Japan,” Seng said. “This is critically important during this economic downturn. While Japan has economic struggles of its own, it has a very strong currency and a relatively high level of stability compared to many other global markets.”

Seng added that expanded market access in Japan remains a top priority for the beef industry, and that he considers the 20-month age limit on U.S. beef eligible for export to Japan a vital issue the countries must address as soon as possible.

TheCattleSite News Desk

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