Exports reflect economic climate

Jun 19, 2009
by WLJ
Exports reflect economic climate

Despite the prolonged slowdown in global economic activity and the initial wave of A-H1N1 Influenzarelated market reactions, exports of U.S. pork and beef held up reasonably well in the month of April. While pork plus pork variety meat exports declined by 10 percent in volume compared to April 2008, the drop in value was limited to about 4 percent. For the first four months of the year, pork export volume (648,063 metric tons or 1.43 billion pounds) is about 3 percent above the record pace of 2008, and the value has increased about 6 percent to $1.495 billion.

April beef plus beef variety meat exports declined 1.4 percent in volume and by 6 percent in value compared to last year. For the first four months of the year, beef export volume has increased 2 percent to 277,019 metric tons (610.7 million pounds) but declined slightly in value to $937 million.

“The good news is that in spite of the turmoil we saw in the latter part of the month, April pork exports were not down as much as had been predicted given the continued economic slump,” said U.S. Meat Export Federation (USMEF) President and CEO Philip Seng. "I believe U.S. beef will perform well this year, but we need to see an economic rebound in key markets like Mexico, South Korea and Taiwan, and the industry also needs expanded access in many of these markets so we can move a wider range of cuts,” Seng said. Specifically, the beef industry is working with trade officials to gain access for U.S. beef in Taiwan that includes bone-in cuts and variety meat. The industry is also seeking relief from the 21-month age limit for cattle from which beef is eligible for export to Japan.

Beef exports from four states—Illinois, Texas, Washington and Wisconsin—have also been sus pended temporarily by Russia. Exports to Mexico and Canada—the top two markets for U.S. beef in 2008—continue to struggle due to a number of factors.

Exchange rates are far less favorable than last year and the down economy—especially in Mexico—has steered consumers toward lower-priced proteins. As a result, beef exports to Mexico are down more than 20 percent in volume and value compared to the first four months of last year. In Canada, U.S. beef exports have declined about 10 percent in volume and 16 percent in value compared to 2008. While a decline in live cattle imports from Canada to the U.S. might suggest an increase in domestic supply, Canada’s cattle slaughter is actually down about 2 percent from last year. This reflects a continued contraction in the Canadian cattle herd, which may bode well for increased beef exports to Canada once more favorable economic conditions return.

The Association of Southeast Asian Nations (ASEAN) region has been a mainstay for U.S. beef exports this year, and April was no exception.

Exports to the region increased by 72 percent in volume over April 2008. Led by a surge in activity in Vietnam, exports to the ASEAN region have increased by 63 percent in volume (to 26,030 metric tons or 57.4 million pounds) and 93 percent in value (to $84.3 million) over January- April of last year. Japan continues to regain strength as a destination for U.S. beef, with April exports climbing by 10 percent over April 2008. For the first four months of the year, beef exports to Japan have increased by about 25 percent in both volume and value compared to the same period last year, totaling 19.914 metric tons (43.9 million pounds) valued at about $106 million. — WLJ