U.S. red meat exports accelerate pace through March

News
May 20, 2011
by WLJ
U.S. red meat exports accelerate pace through March

Exports of U.S. beef and pork continued on a recordsetting pace in March, with beef posting a 65 percent gain in value versus yearago levels and pork showing an impressive 40 percent increase, according to statistics compiled by the U.S.

Meat Export Federation (USMEF).

On a per-head basis, both pork and beef exports achieved record value levels. The U.S. exported 29.4 percent of total pork production with a per-head equivalent value of $56.52. The beef industry exported 15 percent of total production with an export value per head of fed slaughter reaching $205.40.

For the first three months of 2011, beef exports are up 32 percent in volume and 53 percent in value while pork exports are up 18 percent in volume and 25 percent in value compared to the first quarter of 2010.

“We are seeing rebounding global demand for highquality U.S. red meat products, particularly as consumer trust recovers in key markets like Japan and South Korea,” said Philip Seng, USMEF president and CEO. “Certainly, we still are facing obstacles in the international marketplace, such as China’s ban on U.S. beef, Mexico’s NAF- TA-related tariff on U.S. pork, technical issues in Taiwan, and age restrictions on beef exports to Japan, but even without the resolution of any significant access issues, we’re finding increased opportunities to expand market share for U.S. red meat products.”

Record-high export levels

March export levels for both pork and beef set new value and volume records. March pork exports hit 217,025 metric tons and surpassed $553.6 million in value, a 31.3 percent increase in volume and 40 percent jump in value over year-ago levels. For the first quarter of 2011, pork exports accounted for nearly 27 percent of total production and $50.79 in per-head export value.

Total beef exports in March of 117,075 metric tons were 45 percent larger than year-ago and up 18 percent from March 2003. On a value basis, exports were recordlarge at $475.2 million, up 65 percent versus both March 2010 and March 2003. For the first quarter, exports were up 53 percent in value and 32 percent in volume, totaling $1.2 billion and 296,535 metric tons. On a value basis, exports have exceeded 2003 levels for the past five months and export volume also has exceeded 2003 in three of the past five months.

For the first quarter of 2011, beef exports equated to 13.4 percent of production with value at $186.58 per head of fed slaughter.

South Korea sets pork import pace

As expected, pork export growth has been led by a 212 percent increase to South Korea, totaling 73,905 met ric tons valued at $175.9 million in the first quarter and 41,190 metric tons valued at $94.6 million shipped in March (more than four times higher than March 2010 and by far a new monthly record). Korea’s culling of one-third of its herd due to foot-and-mouth disease and the corresponding opening of a duty-free tariff rate quota have helped stimulate worldwide pork exports to Korea, although U.S. pork is gaining market share over international competitors. Currently, the U.S. holds a 36 percent market share of Korea’s imported pork versus 28 percent last year.

“While pork buying patterns in Korea tend to slow in the spring and U.S. prices are traditionally higher in the summer, we are focused on maintaining our momentum throughout the year,” said Seng. “The National Pork Board has responded to USMEF’s request by allocating $240,000 in pork checkoff dollars to expand and intensify our campaign to promote U.S. pork to Korean consumers, importers and meat industry professionals.”

Seng also noted that US- MEF is seeking additional funds through the USDA’s Market Access Program (MAP) to sustain this program over multiple years.

The U.S. faces aggressive competition in Korea from the European Union (EU), Canada, Chile and other nations. The pending U.S./ Korea free trade agreement (FTA) would be helpful in

reducing tariffs and keeping the price of U.S. pork competitive. Korea and Chile approved an FTA in 2004 and since that time, Chilean pork exports to Korea have quadrupled in value to $111.5 million last year. The EU/Korea FTA also will be implemented in July, creating additional pressure for passage of the U.S./Korea FTA to maintain a level playing field.

Other pork exports

U.S. pork exports to Japan have continued their strong pace—up 31.7 percent in volume and 33.5 percent in value in March and a solid 24 percent in volume and 23 percent in value for the quarter. The U.S. also recaptured its 46 percent market share of Japan’s total pork imports after a slight decline last year.

Mexico remains the top volume destination for U.S. pork, buying 139,591 metric tons in the first quarter, 5 percent less than 2010. In terms of value, exports to Mexico are essentially level for the quarter ($255.4 million), but edged up 3.4 percent in March versus yearago levels.

Seng noted that high prices have likely dampened Mexico’s demand, especially with a 5 percent duty on bone-in ham and shoulder cuts resulting from a NAF- TA trucking dispute, but exports have mostly held on a value basis and could be helped by the strengthening peso.

Other key export markets for U.S. pork include:

China/Hong Kong— This region increased U.S. pork imports 31 percent to 89,043 metric tons valued at $129 million in the first quarter while March imports of 32,614 metric tons were up 51 percent from year-ago when H1N1 restrictions still hampered exports to China. Export values in March rose 31.4 percent to $47.5 million. China’s hog prices are reportedly on the rise, helping build demand for imported pork. The U.S. market share has surged this year—accounting for 40 percent of China/Hong Kong’s firstquarter imports, up from just 16 percent last year.

Australia—Exports here in the first quarter were up 28 percent to 18,554 metric tons valued at $58.2 million. March shipments of 9,245 metric tons were up 67 percent in volume and 125 percent in value ($29.2 million) from year-ago. The strong Australian dollar—currently trading around $1.08/U.S. compared to an April-May 2010 average of around 90 cents—is no doubt helping pull more U.S. pork into the country.

Central/South America—First-quarter exports to this region were up 23 percent in volume to 18,834 metric tons valued at $46 million, a 36 percent hike. In March, exports of 7,706 metric tons were up 48 percent while values rose 57.6 percent to $17.6 million. Exports to Chile surged 231 percent to 5,148 metric tons in the quarter while exports to Honduras and Guatemala each increased 12 percent, to 5,922 metric tons and 2,423 metric tons, respectively.

Russia—March exports of 4,863 metric tons were double year-ago levels and first quarter exports of 12,872 metric tons were up 189 percent from the very low levels of 2010 when the Russian market was essentially closed to U.S. pork.

Similarly, the value of exports to Russia is up 321 percent ($35.2 million) for the quarter and 237.2 percent ($14.1 percent) for March.

Others—First quarter exports to the ASEAN, Taiwan and the Caribbean were all lower, partially reflecting market access issues (particularly in Taiwan) and the impact of higher prices mixed with increased domestic production (especially the Philippines).

South Korea also sets beef pace

The top growth market for beef was South Korea with first quarter exports up 181 percent to 52,635 metric tons and value up 190 percent to $226.4 million. This put Korea narrowly behind Mexico for the top spot among U.S. beef export destinations. Total March beef exports of 24,485 metric tons surged above March 2003 volume (when Korea was the No. 3 export market for U.S. beef) and were three times larger than March 2010 exports. The U.S. accounted for 38 percent of Korea’s first quarter beef imports, up from 30.5 percent market share one year ago Last week, USMEF was designated as the recipient of $1 million in USDA MAP funds to augment its current efforts to address the impact of non-science-based import regulations on U.S. beef exports to South Korea and build consumer confidence in U.S. beef. USMEF also is applying for an additional $10 million in MAP funds over five years to expand and intensify the program.

“The U.S. meat industry has faced unprecedented and unscientific technical barriers to trade that, in the name of food safety, have unnecessarily restricted U.S. exports,” said Seng. “These new resources will enable us to expand and intensify our efforts with the goal of the complete restoration of the beef market in Korea.”

As is the case with pork exports to Korea, the pending approval of the U.S./ Korea FTA would reduce tariffs on U.S. beef exports to that nation and help ensure competitive pricing for U.S. products.

Other beef exports

Japan—Exports to Japan surged in the first quarter, up 73 percent to 31,989 metric tons and up 85 percent in value to $176.4 million. March exports of 11,630 metric tons were up 70 percent and 91.2 percent in value ($70.2 million) from March 2010.

Weekly beef export data indicates that shipments to Japan have maintained this strong pace, even following the devastating March 11 earthquake. The U.S. also has gained beef market share in Japan, accounting for 19.5 percent of first quarter imports, up from 15 percent year-ago. Japan is currently the fourth-largest market for U.S. beef, following Mexico, Korea and Canada.

Mexico—March exports showed reason for continued optimism, up 24 percent to 23,307 metric tons and up 44.4 percent in value to $87.8 million. First-quarter exports are up 10 percent in volume to 63,849 metric tons and up 30 percent in value to $239.4 million. U.S. imports of feeder cattle from Mexico also have been strong this year, following a 30 percent increase last year, which could help demand for more beef from the U.S.

Canada—Up 15 percent in volume (36,922 metric tons) and 35 percent in value ($187.7 million) for the quarter and on a similar pace in March. Canadian cattle slaughter was down 10.6 percent through April of 2011 as years of herd liquidation have limited beef production. This, along with a strong Canadian dollar, should continue to support imports of U.S. beef. Imports of live cattle from Canada also were down 20 percent in the quarter, further evidence of tight supplies of cattle to the north.

Middle East—Despite unrest in the region, the Middle East continues to be a booming market for U.S. beef. First quarter totals are up 35 percent in volume (35,143 metric tons) and 63 percent in value ($71.5 million). In March, year-overyear increases of 33.6 percent in volume and 42.6 percent in value were achieved.

Russia— Continued growth in exports to Russia—up 9 percent in volume (13,964 metric tons) and 12 percent in value ($32.4 million) for the quarter. March shipments jumped 26.7 percent in volume and 11.2 percent in value. Exports should gain further momentum in the coming months to fill the U.S. tariff rate quota of 41,700 metric tons (20,000 metric tons higher than last year).

ASEAN—First quarter exports to this region were down 19 percent in volume (17,777 metric tons) and 14 percent in value ($61.3 million) due to a 43 percent volume decline to Vietnam. However, exports to Indonesia doubled in volume, reaching 4,435 metric tons valued at $6.2 million while exports to the Philippines increased 21 percent to 2,957 metric tons valued at $9.2 million, a 30 percent hike.

Hong Kong—Beef exports jumped 72 percent in volume (13,082 metric tons) and 107 percent in value ($59.7 million) for the quarter. In March, volumes were up 46 percent over year-ago levels while values doubled.

Taiwan—Reflecting market access challenges, first quarter exports to Taiwan were down 20 percent in volume (6,789 metric tons) and 13 percent in value ($39.2 million), but March totals showed some rebound, up 4.4 percent in volume and 9.9 percent in value. Taiwan’s import data for April also show improvement.

Lamb exports

Lamb exports for the quarter continue to be higher in volume and lower in value versus 2010 levels: up 18 percent in volume and down 10 percent in value. Mexico remains the top export market, buying 57 percent of all U.S. lamb exports while accounting for 43.9 percent of the value. — WLJ

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