Beef exports could rise in 2010

Mar 5, 2010
by DTN

U.S. beef exports could rise this year, but a gain will depend to a large degree on economic conditions in importing countries.

Demand for U.S. beef improved in the fourth quarter of 2009, and market analysts expect the trend to continue into this year. If it does, then 2010 beef exports could exceed 2009 by a significant margin, they said.

“If the economy in key markets continues to improve, we’re looking for a 10 percent increase” in total U.S. beef exports from last year, said Joe Schuele, communications director for the U.S. Meat Export Federation (USMEF). “The last couple of months of 2009 gave an indication of that.”

Although 2009 beef exports were about 9 percent below 2008 in volume at 897,376 metric tons, and about 15 percent lower in value at $3.08 billion, U.S. beef exports in December rose 9 percent in volume and 4 percent in value from the same month a year ago, according to the USMEF.

Some countries are showing more economic stability as they recover from the global recession, said Ted Schroeder, agricultural economist at Kansas State University. Some countries also show more growth potential, especially where gross domestic product shows notable growth, such as in Vietnam, he said.

Mexico was seen as a key player in USMEF’s 2010 prediction, Schuele said. The country experienced a deep recession, and a resulting devaluation of the peso, but holds promise of a resurgence as the economy begins to recover. Mexican beef imports from the U.S. in 2008 were more valuable at $1.4 billion than exports to all of the world in 2005 at $1.36 billion, he said.

Besides the recession, Mexico’s U.S. beef purchases were hurt by the H1N1 flu outbreak, Schuele said.

The outbreak slowed tourism and hurt consumption at restaurants and hotels, which hurt beef demand more than pork. Locals also traded down from beef to pork, which had an added problem in that H1N1 affected Mexico’s ability to export pork, he said.

But even though U.S. beef demand took a hit in the 2009 world economy, it could have been worse. US- MEF figures showed that Brazil’s beef exports declined 23 percent in value to $3.89 billion, Australia’s were down 18.5 percent to $3.76 billion, and New Zealand was off 19 percent to $1.233 billion.

Aside from growth in Mexico’s economy, Pacific Rim countries appear to hold growth potential for 2010, Schuele said. U.S. beef exports to Japan were up 23 percent at 91,467 tons in 2009 from 2008.

Japan’s beef imports could be higher if it weren’t for the ban on meat from cattle over 20 months of age at slaughter, Schuele said. In late fall and through the winter, the U.S. runs short of beef that meets this criteria.

South Korea also holds promise as a growth market for U.S. beef exports, Schuele said. Although down in 2009 from 2008, exports to this country strengthened as the year came to a close. December exports to South Korea, at $29.48 million, were nearly double the value of December 2008, for instance.

Officially, China is open to U.S. beef, but the guidelines are such that USDA has not issued an export license for direct shipments to the country, Schuele said.

Hong Kong and Vietnam were seen as potential growth markets for 2010. Other market analysts said these markets have provided a sort of back-door access to China and show little sign of topping, at least in the near term. — DTN