Remember the economic basics amid trade turbulence

Barge and ship traffic transporting export cargo on the Mississippi River in the Port of New Orleans, LA.

May exports of U.S. pork and beef were steady with last year’s strong volumes and increased year over year in value, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

May beef exports were also steady year over year in volume (117,541 metric tons [mt]) while export value increased 1 percent to $727.6 million—the second highest on record, trailing only the August 2018 total of $751.7 million. For January through May, exports were 3 percent below last year’s record pace in volume (530,088 mt) but only slightly lower in value at $3.3 billion.

Beef export value per head of fed slaughter averaged $312.85 in May, down slightly from a year ago. For January through May, beef export value averaged $309.33 per head, down 3 percent. May exports accounted for 14.6 percent of total U.S. beef production and 12 percent for muscle cuts only, each down slightly from a year ago. For January through May, exports accounted for 14 percent of total production and 11.3 percent for muscle cuts—down from 14.6 percent and 11.9 percent, respectively, a year ago. (Please note: Due to a calculation error, the percentage of beef production exported was incorrectly reported from January 2017 through April 2019. These ratios have now been corrected, and are about 1.1 percentage points higher than originally reported.)

Pork exports totaled 217,999 mt in May, steady with last year’s pace, while value increased 1 percent to $567.8 million—the highest monthly value total since April 2018. For January through May, pork exports were still 4 percent below last year in volume (1.035 million mt) and down 10 percent in value to $2.57 billion.

Pork export value averaged $54.83 per head slaughtered in May, the highest monthly average since May 2018 ($55.05). For January through May, export value averaged $48.74 per head, down 12 percent from the same period last year. May exports accounted for 27.3 percent of total U.S. pork production and 23.2 percent for muscle cuts only, down from 27.8 percent and 24 percent, respectively, a year ago. For January through May, exports accounted for 25.4 percent of total pork production (down from 27.5 percent) and 22.1 percent for muscle cuts (down from 23.7 percent).

Korea, Taiwan lead strong month for beef exports

Beef exports to South Korea remained on a record pace in May, climbing 11 percent to 23,004 mt and 13 percent in value to $165 million. January-May exports to Korea were 11 percent above last year in volume (101,761 mt) and 15 percent higher in value ($743.5 million). With continued growth at retail and foodservice, U.S. share of Korea’s chilled beef imports reached a post-BSE high of 61 percent, up from 57 percent last year and 52 percent in 2017. Chilled beef from the U.S. totaled 22,268 mt, up 8 percent year over year, valued at $224 million, up 12 percent.

Following a fairly steady first quarter, beef exports to Taiwan strengthened for the second straight month in May at 5,873 mt (up 27 percent from a year ago), valued at $52.6 million (up 28 percent). Through May, exports to Taiwan were 11 percent above last year’s record pace in volume (24,478 mt) and 4 percent higher in value ($218.2 million).

Though slightly below last year’s level, May export volume to leading market Japan rebounded to 29,749 mt, while value was down 3 percent to $190.8 million. Export volume through May was steady with last year’s pace at 128,045 mt while value increased 1 percent to $828 million. This performance was driven in part by a large increase in beef variety meat exports (mainly tongues and skirts), which jumped 23 percent in volume (24,135 mt) and 20 percent in value ($157.5 million). Despite the tariff disadvantages, U.S. beef’s share of Japan’s imports has held nearly steady this year at 41 percent, but with a level playing field there are tremendous opportunities for growth. For example, Japan’s imports of Canadian and Mexican beef increased by 76 percent and 39 percent, respectively, through May.

“The explosive growth U.S. beef has achieved in Korea and Taiwan is a testament to the quality of the product and the outstanding customer base the U.S. industry has established over the years,” Dan Halstrom, USMEF CEO and president said. “That same dynamic is present in Japan, on an even larger scale. But for Japan to remain the ‘strong growth’ column, it is essential that we have market access comparable to our key competitors.”

Other January-May highlights for U.S. beef include:

• Mexico is a very solid market for U.S. beef in 2019. Although exports through May were 2 percent below last year’s pace at 97,102 mt, value increased 8 percent to $462.1 million. This was due to strong growth in muscle cut exports, which were up 7 percent from a year ago in volume (59,357 mt) and 10 percent in value ($361.5 million).

• Exports to the Dominican Republic remain on a tremendous roll, soaring 50 percent above last year’s record pace in volume (3,741 mt) and gaining 39 percent in value to $30.3 million. U.S. beef continues to capitalize on market access improvements secured in the Dominican Republic-Central America-U.S. Free Trade Agreement with exports to Central America also increasing 5 percent from a year ago in volume (5,699 mt) and 10 percent in value ($33.8 million). Growth leaders in the region include Costa Rica, Guatemala, Honduras and Nicaragua.

• January-May exports to Egypt, the largest destination for U.S. beef livers, were down 7 percent year over year in volume at 28,912 mt, but increased 6 percent in value to $34.8 million. Exports strengthened in May, increasing 26 percent in volume (6,224 mt) and 35 percent in value ($7.1 million) year over year. This was significant, as changes in Egypt’s halal certification process that took effect May 1 are a concern for the U.S. industry. But at least so far, these changes do not appear to be slowing exports.

• Retaliatory tariffs in China and other market access challenges limited U.S. beef exports to China/Hong Kong, with January-May volume down one-third to 38,405 mt and value declining by 27 percent to $322 million.

Mexico fuels big month for U.S. lamb exports

Recent momentum for U.S. lamb exports has been led by strong variety meat demand in Mexico. Lamb variety meat exports to Mexico set a record in 2018 at more than 10,000 mt and are well ahead of that pace this year. One of the factors driving this success is the growing popularity of lamb neck meat for barbacoa, an item USMEF has aggressively promoted to importers in Mexico. Lamb muscle cut exports to Mexico also climbed significantly in May as combined lamb and lamb variety meat exports reached 1,155 mt, up 41 percent from a year ago, while value increased 67 percent to $1.4 million.

On a global basis, May lamb exports totaled 1,310 mt, up 31 percent from a year ago, while value increased 30 percent to $2.3 million. This pushed January-May exports 51 percent above last year in volume (6,710 mt) and 26 percent higher in value ($11.5 million). For muscle cuts only, January-May lamb exports were up 14 percent in volume (1,041 mt) and 19 percent in value ($6.7 million). — USMEF

Load comments