U.S. beef exports climb
U.S. beef export volume reached the highest volume of the year during October, according to statistics released by USDA and U.S. Meat Export Federation. Despite weakened currency valuations of some U.S. trading partners, beef exports in October indicated a rebound may be underway. Volume was 82,627 metric tons (182.2 million pounds) and value was $274.7 million, the largest monthly volume and third-highest monthly value of the year. While still below year-ago levels, October’s beef exports showed a 12 percent increase in volume and 5 percent in value over the prior month, and exceed the 2009 monthly average by 11 percent in volume and 7.5 percent in value. Nonetheless, year-to-date beef exports lag behind last year’s totals in volume and value.
Exporters set sights on Korea
The U.S. Meat Export Federation (USMEF) recently launched a multimedia advertising campaign that aims to reassure South Korean consumers of the safety of U.S. beef and counteract negative images that have persisted since U.S. product re-entered the market in mid-2008. USMEF said in a news release that the campaign consists of TV commercials, print ads and bus ads on the theme of “Trust.” The theme will be integrated into other USMEF activities, including retail and foodservice promotions. The ads involve three women—a rancher, a scientist and a food safety inspector—shown in their work setting as well as with their children. The purpose, USMEF said, is to send a clear message that these women are both professionals as well as mothers who work to guarantee the safety of the beef they feed to their own families. Weekly statistics for U.S. beef exported to South Korea show a steady rebound of sales, with the pace in late November reaching the second-highest level for all of 2009 and the highest level since February.
Pork export sales continue to rise
Pork exports increased in October with total shipments of 164,092 metric tons representing the secondlargest monthly volume this year and pork muscle cut exports reaching their highest volume of 2009 at 128,392 metric tons. Year-to-date exports are down 11 percent in volume and 13 percent in value compared to 2008, a record-setting year for pork exports. However, they remain nearly 50 percent higher than the second-best year on record, 2007. This year, exports account for 22.3 percent of total production, compared to 24 percent last year, while the value of exports equates to $38.17 per hog slaughtered compared to last year’s $42.31. The increased exports are good news for beef producers who have faced intense competition from the increased volume of pork on the domestic market. The pork industry has been at a competitive advantage for much of the previous two years due to the lower absolute price of pork which makes it attractive to budget-conscious consumers.
Restaurant recovery still faltering
According to restaurant and foodservice research firm NPD Group, recovery in the foodservice industry remains elusive. According to the results of their recent survey, the five consecutive quarters of decline will continue through at least the first half of 2010 before showing any signs of recovery later in the year. High unemployment, low consumer confidence, tightened credit, lower grocery store prices, and other factors have taken their toll on consumers and their ability to increase spending, resulting in fewer visits to restaurants and related dollar growth, NPD reported. According to the NPD survey, which tracks consumer usage of the foodservice industry, for the quarter ended in September 2009, traffic declined across all restaurant segments. Total industry traffic declined by 4 percent during the quarter compared to the same period a year ago. Visits to quick-service restaurants declined by 4 percent, casual dining was down 5 percent, and mid-scale visits were down 4 percent. Consumer spending for total restaurants declined 2 percent.
National Beef may get ratings upgrade
Credit rating agency Standard and Poor’s announced it has placed National Beef Inc. on Credit Watch with positive implications. National Beef has filed an initial public offering for up to $337 million and plans to use some of the proceeds to reduce debt, including repaying $27 million of remaining balances of its senior unsecured notes due 2011. Despite weaker demand for beef in 2009 compared with 2008, National Beef effectively managed its cost structure and working capital to help grow its EBITDA (earnings before interest, taxes, depreciation and amortization) and generate free cash flow over the past two years, the rating agency said in a news release.