U.S. beef exports trended lower in May, due in part to interruptions in slaughter and processing, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Beef exports dropped well below year-ago levels and recorded the lowest monthly volume in 10 years.
“As protective measures related to COVID-19 were being implemented, plant disruptions peaked in early May with a corresponding temporary slowdown in exports,” said USMEF President and CEO Dan Halstrom. “Unfortunately, the impact was quite severe, especially on the beef side. Exports also faced some significant economic headwinds, especially in our Western Hemisphere markets, as stay-at-home orders were implemented in key destinations and several trading partners dealt with slumping currencies.”
Halstrom noted that the recent rebound in beef production will help exports regain momentum in the second half of 2020. The global economic outlook is challenging, but he looks for export volumes to recover quickly in most markets as U.S. red meat remains an important staple, not only in the United States but for many international consumers as well.
“In what has been a remarkably turbulent year, consumer demand for U.S. red meat has proven very resilient,” he said. “Now that production has substantially recovered, the U.S. industry is better able to meet the needs of both domestic and international customers. While the foodservice and hospitality sectors face enormous challenges, they are on the path to recovery in some markets while retail demand remains strong. Retail sales have also been bolstered by a surge in e-commerce and innovations in home meal replacement, as convenience remains paramount.”
May beef exports were down 33 percent from a year ago to 79,280 metric tons (mt), with value falling 34 percent to $480.1 million, as shipments were higher than a year ago to Hong Kong and China but trended lower to most other markets. For January through May, beef exports fell 3 percent below last year’s pace in volume (512,596 mt) and 5 percent lower in value ($3.14 billion).
Exports accounted for 12.5 percent of total beef production in May and 10.5 percent for muscle cuts only, down from 14.6 percent and 12 percent, respectively, in May 2019. For January through May, exports still accounted for slightly higher percentage of both total beef production (14.1 percent, up from 14 percent) and muscle cut production (11.6 percent, up from 11.3 percent) compared to last year. Beef export value per head of fed slaughter averaged $282.48 in May, down 10 percent from a year ago. The January-May average was $318.87 per head, up 3 percent.
Few bright spots for May
The U.S.-China Phase One Economic and Trade Agreement has provided much-needed momentum for U.S. beef exports to China, which totaled 1,671 mt in May (up 205 percent from a year ago), valued at $13.2 million (up 187 percent). The agreement’s red meat trade provisions took effect in late March, and in just a short time helped January-May exports to China reach 4,926 mt (up 66 percent from a year ago) valued at $38.9 million (up 71 percent).
“Phase One provided significant market access gains for U.S. beef, finally putting the U.S. industry in position to compete in the world’s fastest growing beef market,” Halstrom said. “These early results are really just a small preview of what we expect to see as China’s foodservice sector regains momentum and U.S. beef production returns to its normal level.”
Beef exports to Hong Kong also trended higher in May, reaching 8,397 mt (up 10 percent from a year ago) valued at $68 million (up 8 percent). For the first five months of the year, exports still trailed last year’s pace by 11 percent in volume (31,610 mt) and 10 percent in value ($270.6 million).
Led by growth in South Africa, Gabon, Angola and Cote d’Ivoire, Africa continues to emerge as a key destination for beef variety meat in 2020. May variety meat exports nearly doubled in both volume (2,692 mt, up 99 percent) and value ($2 million, up 94 percent) from a year ago and for January through May, exports totaled 12,783 mt (up 123 percent) valued at $9.6 million (up 115 percent).
Other January-May results
May exports to leading market Japan dipped 33 percent from a year ago in volume (19,986 mt) and 36 percent in value ($121.9 million). But exports through May remained ahead of last year’s pace, increasing 5 percent in volume (134,138 mt) and 2 percent in value ($841.7 million).
Exports to South Korea were also hit hard in May at 18,319 mt, down 20 percent from a year ago, with value dropping 27 percent to $120.4 million. Through the first five months of the year, export volume to Korea was steady with last year’s record pace at 101,664 mt but value declined 3 percent to $719.2 million.
U.S. beef is also coming off a record year in Taiwan. Despite lower results in May, exports to Taiwan remained 2 percent ahead of last year’s pace at 24,889 mt, with value slightly lower at $215.8 million (down 1 percent).
The combination of lower U.S. production, COVID-19-related restrictions and a slumping peso hammered May exports to Mexico, with volume plunging 65 percent to just 6,989 mt, valued at $25.5 million (down 72 percent). For January through May, exports to Mexico were down 21 percent to 77,037 mt, valued at $356.9 million (down 23 percent).
Despite trending lower in May, beef exports to Canada remained substantially ahead of last year’s pace at 46,762 mt, up 15 percent from a year ago, while value increased 16 percent to $307.3 million. Demand for beef variety meat has been especially strong in Canada, with exports jumping 33 percent to 4,332 mt, valued at $8.6 million (up 44 percent).
Lamb muscle cut volume increases
May exports of U.S. lamb totaled 1,127 mt, down 14 percent from a year ago, while value fell 46 percent to $2.33 million. For January through May, exports were down 19 percent in volume (5,463 mt) and 28 percent in value ($8.21 million). Lamb muscle cut exports have trended higher in 2020, increasing 120 percent through May to 2,288 mt, but value trended lower at $5.33 million (down 20 percent). Muscle cut export growth has been driven primarily by Mexico (1,835 mt, up 448 percent, valued at $2.23 million, up 51 percent), though May data also showed a large increase to Hong Kong. — USMEF
