May Beef Results Mixed

US - Although May was the strongest month so far this year for US beef exports, volume (95,221 metric tons) was down 13 per cent compared to May 2011 and stood 10 per cent lower (456,343 metric tons) through the first five months of the year.
calendar icon 16 July 2012
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Beef export value in May ($471.1 million) was 4 per cent higher than a year ago, which kept year-to-date export value ($2.19 billion) 5 per cent ahead of last year’s record pace. These results are based on statistics released by the USDA and compiled by the US Meat Export Federation (USMEF).

Beef exports show no major fallout from BSE case, but volume growth elusive

With the 24 April announcement of the fourth BSE case in the United States, May was the first month in which any BSE-related decline could be detected in export statistics. May beef exports did not reveal a major impact, though global totals were likely affected to some degree by the market closure in Saudi Arabia and negative media coverage in some Asian markets.

“All things considered, we are pleased with the manner in which beef exports have weathered the most recent BSE case,” USMEF President and CEO Philip Seng said. “With the exception of Saudi Arabia, we have not suffered any significant setbacks in terms of market access. And though we expected consumer interest to slow temporarily in markets such as Korea, the May export results were actually quite strong.”

Mr Seng explained that while year-to-date exports to Korea were down 24 per cent in volume (58,143 metric tons) and 17 per cent in value ($273.1 million), May results were higher (+5 per cent in volume, +13 per cent in value) in both categories. He said the main factors impacting US beef exports to Korea in 2012 are an oversupply of domestic beef and a slumping Korean currency, noting that Australia’s beef exports to Korea have also declined by about one-third compared to last year.

In several major markets, beef export volume has slowed moderately compared to the first five months of last year but increases in export value were still achieved. Examples include:

  • Japan, where volume was down 6 per cent to 56,297 metric tons but value was 13 per cent higher at $370.7 million. In May, Japan was the largest destination for US beef with the highest export volume (16,166 metric tons) in 10 months. Export value was up 28 per cent from May 2011 to $105.3 million. Regulatory officials in Japan continue to examine the 20-month cattle age limit on beef imported from the United States, Canada and the European Union, but have so far enacted no change in the policy.

  • In Canada, the only $1 billion market for US beef in 2011, export volume was down 7 per cent to 64,260 metric tons but value was up 10 per cent to $404.5 million.

  • In the Middle East, export volume was down 7 per cent to 60,106 metric tons while value was up 10 per cent to $138.1 million. Although Saudi Arabia was the only country in this region to close to US beef due to the BSE case, confusion regarding possible restrictions (which never materialized) in some other markets may have affected May results. Despite these issues, however, May export volume (12,766 metric tons) to the region was the largest since January.

  • In the ASEAN region, export volume (25,964 metric tons) was down 12 per cent while value ($112.3 million) was 13 per cent higher. This trend was made possible by a surge in export value to the two largest markets, Vietnam (+21 per cent to $82.6 million) and the Philippines (+31 per cent to $18.9 million).

  • In Hong Kong, where US exports are still limited to boneless muscle cuts from cattle under 30 months of age, export volume (19,566 metric tons) was down 15 per cent while export value ($112.9 million) was 12 per cent higher. May export volume to Hong Kong (4,592 metric tons) was the largest of the year.

Two regions in which US beef exports are surging in both volume and value are Russia and Central and South America. Though export activity to Russia has slowed in recent weeks, January-May exports were 24 per cent ahead of last year’s record pace in volume (32,307 metric tons) and 83 per cent higher in value ($138.8 million). Bolstered by terrific growth in Chile, exports to Central and South America were up 42 per cent in volume (14,715 metric tons) and 83 per cent in value ($53.8 million).

“In Russia, we are aggressively promoting US beef across several sectors and in a variety of geographic regions,” Mr Seng said. “From the Black Sea coast where the next Winter Olympics will be held, to the far eastern port of Vladivostok, US beef is becoming more widely known and is in very high demand. Russia has expanded the import quota for US beef this year, and we intend to make full use of that opportunity.”

“In Central and South America, we have capitalized on some excellent growth opportunities,” he explained. “Trade barriers have limited available supplies from Paraguay and Argentina, increasing demand in markets such as Chile, Peru and Colombia. This is one reason for the tremendous interest in this week’s USMEF Latin American Product Showcase, which has attracted a strong turnout of buyers and exporters to Bogota.”

As with pork, US beef exports have slowed dramatically to Taiwan. Exports in May were down about 90 per cent from last year, while year-to-date exports were 54 per cent lower in volume (6,175 metric tons) and 47 per cent lower in value ($39 million). While the Taiwanese government is expected to take action soon on a maximum residue level (MRL) for ractopamine in imported beef, US beef sales likely face a lengthy recovery due to the political controversy surrounding this issue.

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