South Africa offers opportunities of U.S. beef export growth

U.S. Tomahawk steaks on display at a retail outlet in South Africa.

U.S. beef exports soared to another new value record in March, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Lamb exports continued to gain momentum in March, reaching the third largest monthly volume on record and the highest value in nearly eight years.

Beef exports totaled 126,285 metric tons (mt) in March, up 1 percent from a year ago and the third largest on record, while value climbed 33 percent to a record $1.07 billion. First-quarter exports increased 6 percent to 353,852 mt, valued at just over $3 billion (up 41 percent).

“Global demand for U.S. beef has eclipsed anything I have seen in many years in the meat business,” said USMEF president and CEO Dan Halstrom. “While this momentum is fueled by mainstay markets such as South Korea, Japan and Taiwan, demand is also very strong in China/Hong Kong and key Latin American markets, while exports to the Middle East have rebounded impressively.”

Although meat demand remains strong, consumers will have to battle higher meat prices this summer, putting to the test whether they are willing to pay more for meat amid rising inflation costs.

Halstrom cautioned that first-quarter results do not fully reflect the impact of recent COVID-19 lockdowns in China that have slowed product movement and forced many restaurants to suspend or limit service. These obstacles are likely to have a greater impact on April and May export data. He also noted that while beef demand has been very resilient, inflation represents a potential headwind.

“Consumers throughout the world have shown how much they value the quality of U.S. beef, but disposable income is under increasing pressure as they pay more for energy and other daily needs,” he said.

South Korea top destination 

March beef exports to South Korea totaled 26,834 mt, up 11 percent from a year ago, valued at $278.3 million—up 58 percent and the second highest on record, trailing only the record total ($316.4 million) posted in January.

First-quarter exports to South Korea were 75,445 mt, up 9 percent from a year ago, while export value climbed 57 percent to $792.6 million. Export growth to South Korea has been largely driven by soaring retail demand, but the food service climate received a boost in April as South Korea removed all COVID-related limits on restaurant operating hours and lifted most social distancing restrictions on consumers.

Following a similar course, Japan recently lifted the COVID quasi-state of emergency that was in place in 18 of the country’s 47 prefectures. March beef exports to Japan were 25,690 mt, down 10 percent from a year ago, but value still increased 17 percent to $212.6 million. First-quarter exports to Japan climbed 22 percent in value to $594.2 million despite a 4 percent decline in volume (72,179 mt).

China has taken a decidedly different approach to COVID outbreaks, recently imposing lockdowns in several large population centers. These policies have made it difficult for U.S. exporters to supply beef and pork to China and have slowed demand from confined consumers. However, these developments will likely have a more significant impact on second-quarter export results. COVID restrictions also slowed demand in Hong Kong, where the mandatory closing time for restaurants was only recently extended from 6 p.m. to 10 p.m., and the per-table limit was raised from two people to four.

With direct exports to China setting a new record, March beef exports to China/Hong Kong reached 22,745 mt, up 11 percent from a year ago, valued at $207.7 million (up 26 percent). This pushed the first-quarter export volume to 62,237 mt, up 36 percent year over year, while value climbed 59 percent to $582.4 million.

Other first-quarter results 

Exports to Taiwan raced to a fast start in 2022, climbing 47 percent from a year ago to 18,243 mt, while export value nearly doubled to $227.2 million (up 92 percent). The U.S. dominates Taiwan’s chilled beef market, capturing an 80 percent market share. Taiwan has seen surging COVID cases in April and early May but is not imposing lockdowns.

After a record year in 2021, demand in Central America continues to trend higher, led by excellent growth in Guatemala, Panama and Honduras. First-quarter exports to the region increased 14 percent to 5,950 mt, valued at $42 million (up 38 percent).

With food service demand rebounding in the Caribbean, exports increased 41 percent to 6,337 mt, with value more than doubling to $56.8 million (up 109 percent). Growth was led by the Dominican Republic, Jamaica and the Bahamas.

Beef exports to the Middle East continue to rebound, led by stronger variety meat demand in Egypt and muscle cut growth in Kuwait, Qatar and Bahrain. March exports to Qatar were the highest since 2011, and exports to Bahrain were the third largest on record. First-quarter exports to the region increased 13 percent to 18,490 mt, valued at $74.8 million (up 38 percent).

While first-quarter exports of beef variety meat edged modestly higher in volume (353,852 mt, up 3 percent), these items commanded sharply higher prices as export value climbed 34 percent to just over $300 million. In addition to Egypt, export value increased impressively to Japan, China and the Caribbean.

March beef export value equated to $472.73 per head of fed slaughter, up 36 percent from a year ago. The first-quarter average was $474.10 per head, up 41 percent. Exports accounted for 14.7 percent of total March beef production, up from 14.5 percent a year ago, while the ratio for muscle cuts was steady at 12.7 percent. First-quarter exports accounted for 14.7 percent of total production and 12.7 percent for muscle cuts, up from 14.1 percent and 11.9 percent, respectively.

March lamb exports

March exports of U.S. lamb increased 75 percent from a year ago to 1,906 mt, the largest volume since 2011 and the third largest on record. Export value nearly doubled to $2.88 million, up 95 percent and the highest since 2014. Growth continues to be led by variety meat exports to top market Mexico, but muscle cut demand also rebounded in Mexico and the Caribbean and showed promising growth in the Philippines.

First-quarter lamb exports increased 54 percent from a year ago to 5,019 mt, while value climbed 72 percent to $7.35 million. Muscle cut exports grew at an even faster pace, up 80 percent from a year ago in volume (492 mt) and 88 percent in value ($3.04 million). — USMEF

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