Exports post solid gains in June

News
Aug 20, 2010
by WLJ

A very solid June performance allowed U.S. pork and beef exports to finish the first half of 2010 with strong momentum. According to statistics released by USDA and compiled by the U.S. Meat Export Federation (USMEF), pork exports of 164,000 metric tons (361.6 million pounds) were 24 percent higher than June 2009. Pork export value was $316.4 million, up 34 percent. June beef exports were 25 percent above year-ago volumes, totaling 96,578 metric tons (212.9 million pounds), while the value in June was up 37 percent to $377.6 million.

For the first six months of the year, pork exports were 3 percent above their year-ago pace in terms of volume (951,803 metric tons or 2.1 billion pounds). But with much-improved pork prices, export value was nearly 10 percent higher at $2.35 billion. This is even slightly higher than the value reached in the first half of 2008 ($2.32 billion), the year in which pork export value set an all-time record. Export value per head during the six-month period was more than $44—up significantly from $39.20 in 2009. The industry exported 24 percent of its total production, compared to 23 percent last year.

Beef export volume reached 495,443 metric tons (1.09 billion pounds)— up 14 percent over the first half of 2009. Export value has fared even better, rising 22 percent to $1.83 billion. Export value per steer and heifer slaughtered was $139, compared to less than $115 last year. The percentage of total production exported increased from 10 percent to 11 percent.

Pork exports to Japan rebound; Philippines, Western Hemisphere markets also strong

After an early-2010 slump caused mainly by high domestic pork inventories, U.S. pork exports to Japan performed much better in the second quarter. January’s export value was more than 25 percent below the year-ago level. By the end of the first quarter, export value still trailed the 2009 pace by 13 percent. But April, May and June were all solidly in the “plus” column, pushing export volume to 226,171 metric tons (498.6 million pounds) valued at $834 million. This is a slightly higher volume and a 3 percent increase in value over the first half of last year.

“Due to foot-and-mouth disease and some other factors affecting its domestic industry, Japan’s pork production has fallen by about 2 percent in recent months,” said USMEF President and CEO Philip Seng. “USMEF has addressed this situation very aggressively to ensure that we are maximizing all opportunities in the retail, foodservice and processing sectors. But believe me, we are not the only pork supplier to do so.”

The U.S. is the leading foreign supplier of pork to Japan, holding market share of about 45 percent for all imported pork and 72.5 percent of the highvalue chilled market. However, Seng notes that these market shares have declined by about 2 percent since last year and says the U.S. position of market leader absolutely cannot be taken for granted.

“Because of the outstanding return it delivers, Japan is a fiercely competitive market,” he said.

“Japan is the No. 1 target for almost every pork-exporting nation, so growing our market share in Japan will always require that we remain very aggressive and innovative. When Japan’s demand for imported pork increases, that’s a great opportunity for the U.S. industry. But it will be an opportunity missed unless we are very aggressive in capitalizing on it.”

“With the domestic economy still struggling, strong performance in the foreign markets is really a shot in the arm for the U.S. meat industry.”

After shattering their all-time high in 2009, pork exports to Mexico have been on a record pace again this year. Through June, pork export volume to Mexico reached 269,598 metric tons (594.4 million pounds)—a 7 percent increase over the first half of 2009. At the same time, pork export value has been especially strong, rising 31 percent to $482.5 million.

Other market highlights include:

Exports to Canada for the first six months of 2010 reached 88,528 metric tons (195.2 million pounds) valued at $298 million—an increase of 13 percent in volume and 23 percent in value over the first half of 2009. U.S. pork also performed well in other Western Hemisphere markets, increasing 30 percent in volume (20,170 metric tons or 44.5 million pounds) and 45 percent in value ($43.7 million) in Central America. For South America, exports were up 27 percent in volume (8,445 metric tons or 18.6 million pounds) and 55 percent in value ($21.3 million).

The Philippines has emerged as an exceptional market for U.S. pork, with exports increasing by 78 percent in volume to 32,620 metric tons (71.9 million pounds) and nearly doubling in value to $62 million.

Exports to Australia, also a rapidly emerging market for U.S. pork, increased 28 percent in volume and 38 percent in value to 26,981 metric tons (59.5 million pounds) valued at $68 million.

Asian markets bolster global beef exports, with signs of recovery in Mexico

Throughout the first half of 2010, Mexico has been the only major market in which U.S. beef exports have trailed last year’s pace. That trend continued through June, with exports to Mexico trailing January-June 2009 totals by 24 percent in terms of both volume (117,196 metric tons or 258.4 million pounds) and value ($380.4 million). Exports to Mexico have shown recent signs of improvement, however, with weekly export data for the last three weeks of July and the first week of August exceeding year-ago volumes.

Canada, the No. 2 market for U.S. beef, has been flat in terms of volume (70,957 metric tons or 156.4 million pounds) and 4 percent higher in value ($322 million) compared to the first half of 2009.

Elsewhere, U.S. beef exports are on a very powerful roll. In South Korea, export volume is nearly double the pace of 2009 at 50,221 metric tons (110.7 million pounds) and up nearly 130 percent in value to $225 million.

“The re-emergence of U.S. beef in Korea is very gratifying,” Seng said. “Just a few months ago, we were struggling to gain any traction in the foodservice and retail sectors in Korea. But we have worked very hard through our ‘Trust’ imaging campaign for U.S. beef and in building relationships with both beef buyers and consumers to regain consumer confidence, and this has created much more interest among the supermarket and restaurant trade. USMEF recently partnered with Lotte Mart, a major Korean supermarket chain, on a very successful reintroduction of T-bone steaks in Korea. That’s just one of many examples of our progress in this very critical and competitive market.”

Despite the continued 20-month age restriction on eligible cattle, beef exports to Japan maintained their steady growth. Exports totaled 51,677 metric tons (113.9 million pounds) valued at $270 million—an increase of 29 percent in both volume and value over the first half of 2009. Other key Asian markets also performed extremely well, including:

Vietnam, where exports were 30,762 metric tons (67.8 million pounds) valued at $111.7 million—an increase of 8 percent in volume and 23 percent in value over 2009.

In Hong Kong, exports reached 14,160 metric tons (31.2 million pounds) valued at $56 million. This is an increase of 74 percent in volume over last year’s pace, and more than double the value.

Exports to Taiwan were up 40 percent in volume and more than 50 percent in value, reaching 17,398 metric tons (38.4 million pounds) valued at $91 million.

In the Philippines, exports increased 66 percent in volume and nearly 50 percent in value, totaling 4,873 metric tons (10.7 million pounds) valued at $12.9 million.

Another shining star was Russia, where exports are up nearly 300 percent in volume (30,108 metric tons or 66.4 million pounds) and almost 1,000 percent in value ($87 million). With half the year remaining, Russia is already within 10 percent of its all-time, single-year value record for imports of U.S. beef—$95.3 million, in 2008.

USMEF Chairman Jim Peterson, a rancher from Buffalo, MT, says the firsthalf export results are a source of optimism for U.S. cattle and hog producers.

“With the domestic economy still struggling, strong performance in the foreign markets is really a shot in the arm for the U.S. meat industry,” he said. “I am especially encouraged by the strong prices our products are commanding overseas and the excellent return this is delivering to U.S. farmers and ranchers.” — WLJ

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