Beef exports were down sharply from a year ago in June, reflecting a lingering impact of a temporary slowdown in beef production combined with restrictions on foodservice and weakening economies in major import markets. June lamb exports trended higher, posting the second largest totals of 2020.
“We expected that the interruptions in red meat production would continue to weigh on June exports, but anticipated more of a rebound from the low May totals—particularly for beef,” said U.S. Meat Export Federation (USMEF) President and CEO Dan Halstrom.
“But it takes time for the entire chain to adjust to supply shocks, and thus it was another difficult month for exports. However, weekly U.S. export data suggest an upward trend in demand in most markets, and with production recovering the U.S. has regained its supply advantage. So we expect beef and pork exports to regain momentum in the second half of the year.”
June beef exports were close to the May lows, down 33 percent from a year ago to 79,013 metric tons (mt), with value falling 32 percent to $492.3 million. Exports were below year-ago levels to most markets but trended higher to Canada, China and South Africa. For January through June, beef exports fell 9 percent below last year’s pace in volume (591,609 mt) and 10 percent lower in value ($3.63 billion).
Exports accounted for 9.7 percent of total beef production in June and 8 percent for muscle cuts, down sharply from a year ago (15.4 percent and 12.7 percent, respectively) and the lowest in 10 years. First-half exports accounted for 13.3 percent of total beef production and 10.9 percent for muscle cuts, down from 14.2 percent and 11.6 percent, respectively, last year. Beef export value per head of fed slaughter averaged $219.53 in June, down 32 percent year over year. The first-half average was $300.43 per head, down 4 percent.
China, Canada among few bright spots
Capitalizing on the recently implemented U.S.-China Phase One Economic and Trade Agreement, June beef exports to China climbed 125 percent from a year ago to 1,986 mt, valued at $15.2 million (up 111 percent). This pushed first-half exports to China 80 percent above last year’s pace in both volume (6,912 mt) and value ($54.1 million).
“While Phase One was signed in January, the red meat trade provisions weren’t implemented until late March,” Halstrom noted. “That’s when beef from a larger percentage of U.S. cattle became eligible, and more establishments were approved for export to China. So U.S. beef exports are really just beginning to scratch the surface in the world’s largest import market. As China’s foodservice sector gradually recovers from COVID-19 restrictions and as Australia’s export volumes remain limited, the potential for growth will increase even further.
Following a down year in 2019, first-half beef exports to Canada increased 13 percent to 55,099 mt, with value up 14 percent to $370 million. Last year exports were held back to some degree by retaliatory duties on prepared beef products, which were removed in May 2019. Canada is the largest destination for U.S. exports in this category. Beef variety meat exports to Canada were particularly strong in the first half, increasing 35 percent in volume (4,983 mt) valued at $10.5 million (up 56 percent).
June beef exports to leading market Japan rebounded to some degree from the low totals posted in May, but were still well below last year at 20,743 mt (down 30 percent) valued at $143.7 million (down 20 percent). First-half exports fell 2 percent below last year’s pace in both volume (154,881 mt) and value ($985.5) million.
Other highlights for U.S. beef exports
After racing to a strong start in 2020, exports to South Korea have fallen 8 percent below last year’s record pace at 116,724 mt valued at $828.3 million. U.S. beef has a very strong retail presence in Korea, which has helped offset some of the sharp, COVID-19 related decline in foodservice demand.
Beef exports to Taiwan were also record-large in 2019 but fell 7 percent below that pace at 29,101 mt, valued at $252.1 million (down 9 percent). The United States still dominates Taiwan’s high-value chilled beef market, capturing nearly 75 percent of the country’s chilled imports.
With devaluation of the peso compounding the impact of COVID-19 restrictions in Mexico’s foodservice and hospitality sectors, beef exports to Mexico fell 24 percent below last year’s pace at 86,904 mt, valued at $394.6 million (down 27 percent). Mexico is the leading volume destination for beef variety meat exports which have fared better in 2020, falling 3 percent year over year in volume (42,879 mt) and 10 percent in value ($104.9 million).
Although June exports were down slightly year over year, Africa continues to emerge as a strong growth market for beef variety meat. First-half exports climbed 87 percent to 15,131 mt, valued at $11.3 million (up 79 percent), led by South Africa but also with strong growth in Cote d’Ivoire, Gabon and Angola. These markets are among the top destinations for U.S. beef livers, kidneys and hearts.
Mexico fuels rebound in June lamb exports
June exports of U.S. lamb were the second largest of 2020 (following March) at 2,289 mt, up 113 percent from a year ago, while value climbed 29 percent to $2.23 million. First-half export volume was nearly even with last year at 7,752 mt, though value was down 21 percent to $10.43 million. Growth in June was led by a large increase in both muscle cut and variety meat exports to Mexico, the leading destination for U.S. lamb. Exports have also trended higher this year to Hong Kong and Kuwait. — USMEF
