Who could have imagined that U.S. beef exports would add more than $476 to the value of each fed steer or heifer? That’s the eye-popping figure that emerged for the first seven months of this year when the U.S. Meat Export Federation (USMEF) compiled the data for July exports. From virtually no beef export sales in the 1970s, the U.S. in 2021 exported 1.44 million metric tons (mt) of beef and beef variety meat worth $10.58 billion.
Exports last year per head of fed slaughter equated to a record $407, up a whopping 35% from 2020. But the beef export juggernaut has gathered even more pace this year, hence the 17% increase in per-head value versus all of last year. Exports so far this year have topped $1 billion in six months out of seven and are likely to do so again in August and September. Exports totaled over $1 billion in July and posted the fifth largest volume on record for the month. They totaled 126,567 mt, up 3% year over year. For the first seven months of 2022, beef exports increased 6% from a year ago to 870,471 mt, valued at $7.2 billion (up 29%). If the same rate keeps up from August through December, exports would hit a new volume record of 1.49 million mt and a new value record of $12.34 billion, according to my calculations.
July beef export value equated to $472.75 per head of fed slaughter, up 11% from a year ago, USMEF said. The January-July average was $476.38 per head, up 29%. Exports accounted for 16.4% of total July beef production and 14.1% for muscle cuts only, each up about 1 percentage point from last year. The January-July ratios were 15.5% and 13.3%, up from 12.6% and 14.8%, respectively, a year ago.
As USMEF President and CEO Dan Halstrom noted last month, global demand for U.S. beef continues to be amazingly resilient, especially at the retail level. Exports have also benefited from a partial rebound in the food service sector, but this recovery is far from complete. Many markets are still gradually easing COVID restrictions, so USMEF definitely sees opportunities for further growth as restaurant traffic returns. Headwinds remain formidable, however, including further devaluation of key trading partner currencies, he said.
Japan, as it has been for some years, remained the leading volume market in July. Exports there reached 30,726 mt, up 8% from a year ago, valued at $231.6 million (up 3%). This pushed January-July exports 1% above last year’s pace to 186,239 mt, while value climbed 17% to $1.49 billion.
For beef variety meat, mainly tongues and skirts, exports to Japan were steady with last year at 33,581 mt, but value jumped an impressive 38% to nearly $340 million. These exports are a key reason why total byproduct values (basis is a 1,400 pound steer) averaged $14.62 per cwt the week before last. That’s nearly $205 per head.
Japan’s importance as an export market is even more important when one considers that until 1978, the U.S. exported little beef to Japan, usually less than 10,000 mt per year. However, the Strauss-Ushiba understanding of 1978 between the U.S. and Japan allowed for an increase in the quota for high-quality grain-fed beef from 16,800 mt in 1978 to 30,800 mt in 1983. By 2012, the U.S. exported 152,763 mt of beef products worth $1.03 billion. Yet these numbers more than doubled by 2021, when export volumes hit 320,735 mt worth $2.38 billion.
It was especially fitting, therefore, that leaders representing the U.S. red meat industry recently traveled to Tokyo to commemorate the 45th anniversary of the inaugural USMEF office, which opened in Tokyo in 1977. Japan has consistently been a top customer and is the leading international market for U.S. red meat, purchasing nearly $4.1 billion in 2021, USMEF says. Through July 2022, U.S. red meat exports to Japan reached $2.4 billion.
The U.S.-Japan trade partnership is highly valued by those in the U.S. pork, beef and lamb industries, USMEF says. While in Tokyo for meetings, market visits and a celebration event attended by 200 importers, distributors, trade media and U.S. exporters, industry representatives expressed appreciation for the business relationships developed over the past 45 years and expressed a commitment to serve the Japanese market well into the future.
On a domestic note, widespread drought across large sections of the U.S. continues to impact the placement of cattle into feedlots. August showed that placements that month outpaced last year’s very high number of 2.1 million head by 0.4%. In Texas, the largest cattle feeding state by far, drought-induced placements were up 9%. It remains desperately dry across much of the western U.S., so keep praying for rain. — Steve Kay
(Steve Kay is editor/publisher of Cattle Buyers Weekly, an industry newsletter published at P.O. Box 2533, Petaluma, CA, 94953; 707-765-1725. Kay’s Korner appears exclusively in WLJ.)
