Beef exports trended higher year over year in March, establishing a record first quarter pace, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).
“March export results were very solid, especially given the COVID-19-related headwinds facing customers in many international markets at that time,” said USMEF President and CEO Dan Halstrom. “Stay-at-home orders created enormous challenges for many countries’ foodservice sectors, several key currencies slumped against the U.S. dollar and logistical obstacles surfaced in some key markets—yet demand for U.S. red meat proved very resilient.”
Some recent events, including temporary closures of several U.S. processing plants, are not reflected in the first quarter export data. Halstrom cautioned that April and May exports could slow as a result, but his outlook for 2020 remains positive.
“These are truly unprecedented circumstances, creating an uncertain global business climate,” Halstrom explained. “The U.S. meat industry has spent decades developing a loyal and well-informed customer base throughout the world, which has embraced the quality and value delivered by U.S. red meat. Their commitment to U.S. products during this crisis is much-appreciated.”
Driven by solid growth in Japan, where U.S. beef is benefiting from reduced tariffs under the U.S.-Japan Trade Agreement, as well as South Korea, Mexico, Canada and Taiwan, March beef exports totaled 115,308 metric tons (mt), up 7 percent from a year ago, valued at $702.2 million—up 4 percent and the highest monthly value since July. First quarter beef exports climbed 9 percent from a year ago to 334,703 mt, valued at $2.06 billion (up 8 percent).
Beef export value per head of fed slaughter was $308.21 in March, down 8 percent from the very high March 2019 average. For the first quarter, per-head export value increased 2 percent to $317.06. March beef exports accounted for 13.9 percent of total production and 11.3 percent for beef muscle cuts, down from 14.8 percent and 12 percent, respectively, a year ago. Exports accounted for 14 percent of first quarter beef production and 11.4 percent for muscle cuts, each up slightly year over year. U.S. beef production increased by 14 percent in March and 8 percent in the first quarter as export growth continued to make a critical contribution to carcass value even as the COVID-19 pandemic disrupted the global foodservice sector.
Strong demand for U.S. beef
Leading market Japan set the pace for March beef exports, increasing 16 percent from a year ago to 30,568 mt valued at $193.9 million (up 13 percent and the highest since 2018). First quarter exports increased 12 percent to 82,872 mt, valued at $523.4 million (up 9 percent). Japan’s import data show strong growth across all categories, including chilled cuts (31,645 mt, up 6 percent), frozen cuts (24,560 mt, up 13 percent) and larger volumes of tongues, skirts and hanging tenders.
Beef exports to Korea remain well ahead of last year’s record pace, with March exports climbing 10 percent to 22,608 mt valued at $166.5 million. First quarter exports to Korea increased 14 percent in volume (63,934 mt) and 12 percent in value ($464.9 million). Korea’s imports from Australia and New Zealand slowed in the first quarter, but imports of U.S. beef increased strongly for both chilled (16,520 mt, +31 percent) and frozen (51,345 mt, +7 percent) cuts with strong retail demand and innovative foodservice concepts, including for takeout and delivery. Korea further eased its COVID-19 related restrictions this week, and initial reports on consumer activity over the early May holidays showed a strong recovery in foodservice sales.
Strong momentum for U.S. beef continues in Taiwan, where exports are also coming off a record year. March exports to Taiwan increased 11 percent from a year ago to 5,725 mt, while value climbed 12 percent to $49.5 million. Through March, exports to Taiwan were 17 percent ahead of last year’s pace in volume (15,776 mt) and 15 percent higher in value ($135.7 million). As in Japan and Korea, the U.S. is the largest supplier of beef to Taiwan and saw strong growth as imports from Australia and New Zealand slowed. Chilled beef volume was up 17 percent, driven by strong retail demand. There is optimism for summer foodservice sales, given Taiwan’s successful suppression of the COVID-19 virus.
Other first quarter highlights for U.S. beef exports include:
• Bolstered by strong variety meat shipments, exports to Mexico totaled 59,917 mt valued at $296.6 million, up 4 percent and 6 percent, respectively, from the first quarter of last year. This included a 23 percent increase in variety meat exports (27,198 mt) with value climbing 20 percent to $71.6 million;
• After a down year in 2019, beef exports to Canada rebounded to 28,205 mt, up 22 percent from a year ago. Export value was up 21 percent to $173.6 million. This also included larger volumes of beef variety meat, as exports increased 48 percent in volume (2,813 mt) and 67 percent in value ($5.8 million);
• Led by strong growth in Indonesia and Vietnam for both muscle cuts and variety meat, exports to the ASEAN region reached 15,032 mt, up 15 percent from a year ago, valued at $76.3 million (up 21 percent);
• Led by growth in South Africa and Gabon, exports to Africa more than doubled in volume (7,759 mt, up 101 percent) while value increased 74 percent to $7 million. The vast majority of these shipments were beef variety meat, which totaled 7,637 mt (up 105 percent) valued at $5.83 million (up 99 percent); and
• First quarter beef exports to China increased 12 percent to 1,888 mt, valued at $14.2 million (up 8 percent), but exports are poised for accelerated growth in 2020 under the U.S.-China Phase One Economic and Trade Agreement. The agreement’s red meat trade provisions, which significantly expand access for U.S. beef, were implemented March 20 so the impact will be more evident in the second quarter. — USMEF
