Export data for red meat shipments in January is due to be released Wednesday. The data, which is compiled extremely well each month by the U.S. Meat Export Federation (USMEF), is likely to show again how important beef exports are to the value of live cattle.
That value in 2021 per head of fed slaughter equated to a record $407.22, up a remarkable 35 percent from 2020. That was because beef exports greatly exceeded previous volume and value records in 2021, surpassing $10 billion for the first time. This means they almost doubled in value in 10 years. Exports in 2012 totaled $5.511 billion in value.
December beef exports totaled 121,429 metric tons (mt), up 1 percent from a year ago, while value climbed 33 percent to $991.8 million, the third largest month on record, says USMEF. These results pushed 2021 volume to 1.44 million mt, up 15 percent from a year ago and 7 percent above the previous record set in 2018.
Export value soared to $10.58 billion, up 38 percent from 2020 and shattering the previous record (also from 2018) by 27 percent. Exports accounted for 15 percent of total beef production and 12.8 percent for muscle cuts only, up significantly from the respective 2020 ratios of 13.5 percent and 11.3 percent, says USMEF.
The beef export results were truly remarkable, especially considering the COVID-related obstacles in the global food service sector and all the supply-side and logistical challenges faced by the U.S. industry, noted USMEF President and CEO Dan Halstrom last month. Obviously, the U.S.’ large Asian markets accounted for much of the growth, but it really took broad-based global demand to reach these impressive levels.
This success story is not just about Korea, Japan and China, but also a strong performance in Taiwan, excellent growth in Central and South America and a rebound in Mexico and Southeast Asia, he said.
Another remarkable milestone in 2021 was that beef exports to South Korea, Japan and China/Hong Kong each topped $2 billion, with Korea becoming the highest value market for U.S. beef for the first time. Japan remained the leading volume destination for U.S. beef exports in 2021 at 320,737 mt, up 5 percent from 2020 and the second largest volume of the post-BSE era, said USMEF.
Export value climbed 22 percent to a record $2.376 billion but finished a close second to Korea. The U.S. industry remains concerned about Japan’s import safeguard, which resulted in a higher tariff rate being imposed on U.S. beef in late March and early April last year. Without an adjustment to the safeguard threshold, a similar scenario is possible in 2022 and highly likely in years to come, said USMEF.
Another huge achievement was the exceptional growth in exports to China. I remember being skeptical a few years ago when predictions were made about the country becoming a $2 billion market for U.S. beef. Now, that is close to a reality. Capitalizing on the market access gains included in the U.S.-China Phase One Economic and Trade Agreement, beef exports to China/Hong Kong also broke the $2 billion mark at $2.09 billion, up 114 percent from 2020, said USMEF.
Volume climbed 87 percent to 240,827 mt. Direct exports to China, which started to gain significant traction in mid-2020, jumped 346 percent in volume (190,803 mt) and 413 percent in value ($1.59 billion). U.S. beef accounted for 6 percent of China’s total imports in volume and 11 percent in value. Grain-fed beef now accounts for 11 percent of China’s imports, with the U.S. as the largest supplier, providing 68 percent of China’s grain-fed imports, said USMEF.
Beef exports, however, are likely to ease this year because of tighter supplies and higher U.S. prices, says USDA. In its Livestock, Dairy and Poultry Outlook 2022 report, USDA forecast total beef exports to decline to 3.27 billion pounds. U.S. exports are likely to be pressured by tightening domestic beef supplies, and the resulting higher prices may make U.S. beef less price competitive, it said. Furthermore, increased beef production in export-oriented countries such as Australia and Brazil will likely increase competition in several markets.
Variety meats were another export success story last year and showed why byproduct values remain high. Often referred to by packers as the fifth quarter of a cattle carcass, the combined value of 16 items often approaches or exceeds $200 per head. This is for a slaughter steer reported daily by USDA, using a 1,400 lb. live weight. Many of those 16 items have no domestic market outlet, making their exports vitally important in adding value to fed cattle. — 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.)
