U.S. beef exports were below the record-large totals of 2018 August, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF), while pork exports continued to post very strong results in August.
August beef exports totaled 114,119 metric tons (mt), a 4 percent decline from last year’s large volume, while export value ($690.3 million) was down 8 percent. January-August beef exports were slightly below last year’s record pace, declining 2 percent in volume (881,526 mt) and 1 percent in value ($5.44 billion).
Beef export value per head of fed slaughter averaged $298.94 in August, down 7 percent from a year ago, while the January-August average was down 3 percent to $309.85. August exports accounted for 14 percent of total U.S. beef production and 11.3 percent for muscle cuts only, down from 14.3 percent and 12.2 percent, respectively, last year. Through the first eight months of the year, exports accounted for 14.2 percent of total beef production and 11.6 percent for muscle cuts, down from 14.6 percent and 12.1 percent, respectively, in 2018.
August pork exports increased 22 percent from a year ago to 221,586 metric tons (mt), while export value climbed 19 percent to $588.8 million. These results pushed January-August export volume 4 percent ahead of last year’s pace at 1.7 million mt, while value increased 1 percent to $4.35 billion.
Pork export value averaged $54.18 per head slaughtered in August, up 22 percent from a year ago. For January through August, the per-head average was down 2 percent to $51.70. August exports accounted for 27.1 percent of total U.S. pork production and 23.7 percent for muscle cuts only, up significantly from a year ago (21.9 percent and 19.2 percent, respectively). January-August exports accounted for 26.4 percent of total pork production and 23 percent for muscle cuts, both up slightly year over year.
U.S. beef exports cool in August, but remain on strong pace
After setting new value records in June and July, U.S. beef exports to South Korea slowed 9 percent from a year ago in August to 22,307 mt, while value dropped 11 percent to $157.4 million. But for January through August, exports to Korea were still 8 percent ahead of last year’s record pace in volume (174,290 mt) and 10 percent higher in value ($1.26 billion).
Korean import data through August showed double-digit growth for U.S. beef in the top two cut categories: short rib and short plate/brisket. The U.S. accounted for more than 55 percent of Korea’s chilled/frozen beef import volume, up from 53 percent in the first eight months of 2018.
Similar to pork, the U.S. beef industry looks forward to gaining tariff relief in leading market Japan, where August exports slipped 15 percent from a year ago to 28,646 mt.
Value was down 22 percent to $164.3 million, although it is important to note that exports in August 2018 were a post-BSE record $209.3 million. For January through August, exports to Japan were 3 percent below last year’s pace in volume (217,698 mt) and 4 percent lower in value ($1.36 billion). Beef variety meat exports to Japan (mainly tongues and skirts) have been a bright spot in 2019, increasing 31 percent in volume (44,617 mt) and 18 percent in value ($260 million). U.S. tongues and skirts face higher duty rates than competitors’ products but are tariffed at 12.8 percent compared to 38.5 percent for U.S. muscle cuts.
“The U.S. beef industry is extremely excited at the prospect of lower tariffs in Japan, as 38.5 percent is the highest rate assessed in any major market,” USMEF President and CEO Dan Halstrom said. “As we’ve seen in Korea, where the tariff rate was once 40 percent but has been reduced by more than half, lower tariffs make U.S. beef even more affordable for a wider range of customers. While the agreement still needs parliamentary approval in Japan, importers are already enthused and preparing for long-awaited tariff relief.”
January-August beef exports to China/Hong Kong fell 24 percent from a year ago in volume (60,259 mt) and 20 percent in value ($510.7 million). Several factors have impacted U.S. exports to the region, including street protests in Hong Kong that have slowed commerce and tourism. While supermarket sales remain strong in Hong Kong, the disruption has been particularly hard on the restaurant sector. Although China remains a small destination for U.S. beef and exports are hampered by China’s retaliatory duties, January-August volume increased 23 percent from a year ago to 5,625 mt, valued at $44.7 million (up 12 percent).
January-August highlights for U.S. beef include:
• Exports to Mexico, the third-largest international market for U.S. beef, were slightly lower than a year ago in volume (156,528 mt, down 1 percent), but value increased 5 percent to $729.5 million. Beef variety meat exports to Mexico were down 3 percent from a year ago to 62,504 mt, but commanded better prices as export value increased 12 percent to $166 million;
• Although beef exports to Taiwan were modestly lower year over year in August, January-August exports were still 10 percent above last year’s record pace in volume (42,785 mt) and 7 percent higher in value ($383.9 million);
• Led by surging demand in Indonesia and solid growth in the Philippines and Vietnam, beef exports to the ASEAN region were 27 percent above last year’s pace in volume (37,206 mt) and 12 percent higher in value ($180.6 million);
• Strong August results in Central America pushed exports 4 percent above last year’s pace in volume (9,898 mt) and 10 percent higher in value ($56.7 million), led by a strong performance in Panama and steady growth in Guatemala and Honduras; and
• Beef exports to the Dominican Republic continue to reach new heights, as volume increased 45 percent from a year ago to 6,060 mt, while value climbed 35 percent to $48.6 million.
Halstrom noted that the temporary loss of a major processing plant to a fire likely had a negative effect on August exports, but he does not expect to see a lasting impact.
“Beef supplies are tight throughout the world but the U.S. maintains a supply advantage, as production is expected to be record-large in 2020,” he said. “Both domestic and international demand for U.S. beef remains strong, and there is significant potential for further export growth, especially once the U.S.-Japan agreement is implemented.”
Emerging markets strong for U.S. pork, even as exports rebound to China and Mexico
Although still held back by China’s retaliatory duties, China/Hong Kong was the largest destination for U.S. pork in August at 63,656 mt, more than tripling the August 2018 volume, while export value climbed 160 percent to $137.6 million. For January through August, exports to China/Hong Kong were up 38 percent in volume (356,322 mt) and 17 percent in value ($717.9 million).
Since Mexico removed its 20 percent retaliatory duty on U.S. pork in late May, exports have rebounded significantly but are still trailing the record-large numbers posted in 2017. August exports to Mexico were down 1 percent year over year in volume (61,365 mt), but value increased 18 percent to $121.1 million. A slow start to the year still weighs on January-August exports to Mexico, which were down 11 percent from a year ago in both volume (473,309 mt) and value ($821.8 million).
“China’s demand for imported pork has increased steadily over the past few months and the U.S. industry is well-positioned to help fill that need,” said Halstrom. “But the really positive story behind these numbers is that even as U.S. exports to China/Hong Kong have surged and exports to Mexico rebounded after the removal of retaliatory duties, demand in other markets is proving resilient and continues to grow. This is exactly why the U.S. industry invested in emerging markets over the years, and it is definitely paying dividends.”
The U.S. and Japan recently announced an agreement that will bring tariffs on U.S. pork in line with those imposed on major competitors, and August export results illustrated the pressing need for tariff relief. August volume was down 19 percent to 28,240 mt, while value fell 18 percent to $120.1 million. Through August, exports to Japan trailed last year’s pace by 6 percent in both volume (250,540 mt) and value ($1.03 billion). U.S. exports of ground seasoned pork to Japan have been hit particularly hard by the tariff gap (20 percent compared to 13.3 percent for the European Union and Canada), with Japan’s imports through August falling by 28 percent—nearly $60 million—compared to last year.
January-August highlights for U.S. pork include:
Led by steady growth in mainstay market Colombia and surging demand in Chile, exports to South America climbed 28 percent above last year’s record pace in volume (105,344 mt) and 30 percent in value ($264.7 million). Shipments to Peru cooled in August but have also contributed to export growth in 2019.
• Exports to Central America were 16 percent above last year’s record pace in volume (60,727 mt) and 19 percent higher in value ($147 million). Honduras and Guatemala are the largest Central American destinations for U.S. pork, and exports trended higher to both markets. Panama, Costa Rica and Nicaragua also contributed to regional growth, with exports increasing by double digits;
• Exports to Oceania were up 38 percent from a year ago to 77,556 mt, while value increased 32 percent to $217.1 million. A key destination for hams and other muscle cuts used for further processing, exports to Australia jumped 36 percent from a year ago to 69,692 mt, valued at $192.5 million (up 31 percent). Growth to New Zealand was also impressive, with exports up 52 percent in volume (7,864 mt) and 48 percent in value ($24.6 million);
• While January-August exports to South Korea were down 9 percent from last year’s record pace in volume (145,690 mt) and fell 10 percent in value ($411.8 million), August exports were up significantly as volume climbed 27 percent to 14,336 mt and value surged 35 percent to $42.2 million. In mid-September, South Korea confirmed its first cases of African swine fever (ASF), with 13 outbreaks reported in the northwest corner of the country near the border with North Korea. While the disease is still confined to a relatively small area, ASF is certainly a pressing concern for Korea’s domestic pork industry; and
• ASF has also impacted pork production in Southeast Asia, especially in Vietnam but also recently spreading into the Philippines. While U.S. exports to the ASEAN trailed last year’s pace by 10 percent in volume (35,164 mt) and 19 percent in value ($81.1 million), the region’s need for imported pork is likely to trend higher in coming months.
Lamb exports trend lower in August
August exports of U.S. lamb were down 12 percent year over year at 1,193 mt, while value declined 8 percent to $1.84 million. For January through August, exports remained 32 percent above last year’s pace at 10,626 mt, while value increased 13 percent to $17.5 million.
Lamb muscle cut exports were 17 percent lower than a year ago in volume (1,397 mt) but slightly higher in value ($9.5 million, up 1 percent). Markets showing promising muscle cut growth included the Dominican Republic, Trinidad and Tobago and Panama. — USMEF
