July exports slightly lower than June, but ahead of 2009 pace

News
Sep 17, 2010
by WLJ

July values for U.S. beef and pork exports dipped slightly from the totals achieved in June, but both exceeded year-ago levels with beef posting close to a 40 percent jump over 2009 levels. Based on statistics released by USDA and compiled by the U.S. Meat Export Federation (USMEF), beef export value surged to $366.3 million in July, pushing the cumulative January-July value to more than $2.19 billion—25 percent higher than last year’s pace and virtually even with the pre-BSE peak value of 2003. In terms of volume, the 588,030 metric tons of beef exported through July is 15 percent higher than in 2009.

Pork export value in July was 4 percent higher than last year at $385.8 million, pushing the 2010 cumulative January-July total to

$2.74 billion. This is 8 percent higher than in 2009 and just 1 percent off the all-time record pace established in 2008. July export volume was 4 percent lower than July 2009, but the cumulative volume (1.1 million metric tons) was still up 2 percent from last year.

Beef exports surging in most major markets, showing early signs of recovery in Mexico

Despite being well below last year’s results in Mexico—the No. 1 export market for U.S. beef—and remaining relatively flat in No. 2 market Canada, beef exports are performing extremely well across the globe. South Korea, Vietnam and Russia posted the largest year-over year increases in July, but strong growth has also been achieved this year in Japan, the Middle East, Taiwan, Hong Kong, the European Union and the Caribbean.

Exports to Mexico still trail last year’s pace by more than 20 percent in both volume (138,807 metric tons) and value ($450.5 million), but showed signs of strengthening in July as export value ($70.1 million) was just 3.5 percent below last year’s level.

“While Mexico has been very slow to recover from the economic crisis that first took hold two years ago, we are beginning to see some promising signs,” said Chad Russell, USMEF regional director for Mexico, Central America and the Dominican Republic. “The peso has strengthened modestly in the past few months, and U.S. beef still holds a very strong market share in Mexico. Consumer confidence and buying power also appear to be on the upswing, and recent sales results for U.S. beef reflect that. While we are still a long way from the outstanding results U.S. beef achieved here in 2008, USMEF is continuing to aggressively work with retailers and importers and we are headed in the right direction.”

January-July exports to Canada were even with last year in terms of volume at 84,149 metric tons but up 6 percent in value at $387.4 million. In every other major market, results are substantially above year-ago levels.

Beef highlights include:

Exports to Japan are 25 percent higher in terms of both volume (64,959 metric tons) and value ($336.2 million). A USMEF promotion with nearly 13,000 7-Eleven stores in Japan has helped fuel U.S. beef sales there. The “Sumibiyaki Gyu Karubi Bento” promotion is projected to sell 30 million bento (lunch) boxes containing U.S. beef short plate over the coming year.

Korea continues to climb the export market rankings with results of 63,189 metric tons valued at $290.8 million—an increase of 122 percent and 162 percent, respectively.

Vietnam is still the leading market in the ASEAN region at 31,036 metric tons valued at $112.5 million—up 6 percent and 20 percent respectively. But more dramatic growth in Indonesia and the Philippines pushed the ASEAN region’s results 28 percent higher in volume (44,657 metric tons) and 33 percent higher in value ($145.5 million).

Led by strong exports to Egypt, the Middle East was up 31 percent in volume (69,837 metric tons) and 56 percent in value ($77.3 million) as the region shows an increasing appetite for U.S. muscle cuts. Excellent results were also achieved in The United Arab Emirates and Saudi Arabia.

Exports to Russia totaled 32,982 metric tons valued at $94.1 million—an increase of 154 percent in volume and 575 percent in value, reflecting a surge in muscle cut demand. Muscle cut exports to Russia reached 16,930 metric tons but will likely slow in the remainder of 2010 as the U.S. share (21,700 metric tons) of Russia’s import quota is nearly filled. However, the higher out-of-quota tariff rates do not apply to variety meat.

Taiwan is likely headed for another new value record this year as results reached $109.7 million—up 48 percent compared to last year’s record pace. Volume was up 36 percent to 20,554 metric tons.

Exports to Hong Kong were up 66 percent in volume (18,635 metric tons) and 87 percent in value ($68.9 million).

“In every corner of the world, U.S. beef has made tremendous strides this year,” said USMEF President and CEO Philip Seng.

“And as Mexico begins to show signs of an economic recovery, our product is wellpositioned to capitalize because we are still the dominant provider in that market. If we can move Mexico back into the ‘plus’ column, the global results will be even more impressive.”

Pork export value near record pace; volume slightly ahead of 2009

Strong performance in the top three destinations for U.S. pork—Japan, Mexico and Canada—has helped offset slower results in Korea, Vietnam, China and Russia and has kept export results ahead of last year’s pace. Mexico shattered its all-time record for purchases of U.S. pork in 2009, but has surpassed that pace in 2010 by 8 percent in volume (311,206 metric tons) and an impressive 31 percent in value ($560 million). The market has proven very resilient, even as prices for ham and other popular cuts have risen significantly. It is important to note, however, that new 5 percent retaliatory tariffs on ham and shoulder cuts had not yet taken effect in July.

Japan, by far the largest value market for U.S. pork, got off to a slow start in 2010 but pulled even with last year’s pace in terms of volume (259,947 metric tons) and was 3 percent higher in value ($968.9 million).

U.S. pork sales in Japan received a boost from a promotion USMEF developed with Ebara Foods, Japan’s largest yakiniku seasoning manufacturer, which involved a U.S. pork back rib promotion supported by an estimated $3 million television ad campaign (paid for by Ebara) and in-store promotions at 1,300 retail outlets across Japan.

“We are certainly pleased with the rebound in demand for U.S. pork, but this is not the time for the U.S. industry to let its guard down in Japan,” Seng said. “While Japan’s total pork imports are up, the U.S. market share has actually slipped slightly compared to last year. We cannot afford to be complacent in Japan or rest on our past successes because this is the highestvalue pork market that delivers tremendous returns for U.S. producers. Every

pork-producing country in the world knows this and will leap at the opportunity to capture market share if the United States pulls back.”

Exports to Canada, the third-largest market for U.S. pork, reached 104,132 metric tons valued at $353.8 million—increases of 13 percent and 24 percent, respectively.

Other pork highlights include:

Despite a significant decline in Vietnam, exports to the ASEAN region are up nearly 40 percent in volume (43,629 metric tons) and 50 percent in value ($84.7 million). Extremely strong growth in the Philippines led the region into positive territory, along with a solid increase in exports to Singapore.

Exports to Hong Kong increased by 18 percent in volume (114,771 metric tons) and 6 percent in value ($163.7 million). This helped offset a decline in China caused mostly by lack of market access early in the year, putting the Hong Kong/ China region effectively even with last year’s results. July exports to China were well above year-ago levels, but the market was effectively closed in July 2009 due to H1N1 influenza.

U.S. pork continues to gain traction in Australia, where exports were up 18 percent in volume (35,653 metric tons) and 30 percent in value to $94.2 million.

Led by strong growth in Guatemala and Honduras, exports to Central and South America were up 35 percent in volume (32,480 metric tons) and 39 percent in value to $74.5 million.

U.S. pork has achieved steady growth in the Caribbean, gaining 11 percent in volume (26,933 metric tons) and 21 percent in value to $56.2 million. The Dominican Republic is the largest market in the region, but Trinidad and Tobago have achieved the strongest rate of growth in 2010.

Joel Haggard, USMEF senior vice president for the Asia Pacific, says emerging markets for U.S. pork are an important component of continued export growth.

“We are very bullish on the Philippines, for example, where the economy is showing a lot of promise and the investment we have made in USMEF promotions is really beginning to pay big dividends,” he said. “Australia has also been a very strong area of growth for U.S. pork. USMEF has established excellent relationships with the major meat processors in Australia and we are moving an increasing amount of product into that sector.”

Lamb export volume up, but value trails last year

U.S. lamb exports achieved mixed results through July. Export volume (6,647 metric tons) was 3 percent higher than last year, but value ($13.5 million) was down 18 percent. Exports are down to the Caribbean and Canada, destinations that command higher-value cuts. Exports to Mexico are up substantially—more than 70 percent in volume and 90 percent in value—but these shipments trend toward more economical muscle cuts and variety meat. — WLJ

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