July exports of U.S. beef rebounded from recent lows but remained below 2019 levels, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). July lamb exports increased year over year and were the largest of 2020.
“With production returning to near-normal levels, we definitely saw an improvement in beef exports, though the recovery was not quite as strong as expected,” said USMEF President and CEO Dan Halstrom.
“It is also important to remember that the monthly export data is in the rearview mirror and that weekly export sales data, along with observations from our USMEF-China team, suggest that China’s demand for both U.S. pork and beef will be strong through the balance of the year, including purchases for Chinese New Year.
“When combined with the rebound in other main markets, growth in emerging markets and the return of the U.S. supply advantage, USMEF remains optimistic about a strong finish for U.S. red meat exports in 2020, despite many challenges related to COVID-19.”
July beef exports totaled 107,298 metric tons (mt), up 36 percent from June but still 9 percent below last year. Export value was $647.8 million, the highest since March but down 10 percent from a year ago. July exports to China increased sharply year over year and shipments trended higher to Taiwan, Canada and Hong Kong. July exports were lower than a year ago to Japan and South Korea and declined significantly to Mexico. For January through July, beef exports were also 9 percent below last year’s pace in volume (698,907 mt) and 10 percent lower in value ($4.28 billion).
Beef export value per head of fed slaughter averaged $280.40 in July, down 9 percent from a year ago. The January-July average was $297.21 per head, down 5 percent. Exports accounted for 12.9 percent of total July beef production and 10.8 percent for muscle cuts, compared to 14.4 percent and 11.8 percent, respectively, in July 2019. For January through July, exports accounted for 13.2 percent of total production and 10.9 percent muscle cuts, down from 14.2 percent and 11.6 percent a year ago.
Beef exports to China grow
Since its March implementation, the U.S.-China Phase One Economic and Trade Agreement has sparked growth in China’s demand for U.S. beef. July exports were record-large at 2,350 mt, up 160 percent from a year ago, valued at $14.9 million (up 92 percent). Through July, exports were 95 percent above last year’s pace in volume (9,262 mt) and 82 percent higher in value ($68.9 million).
Beef exports to Hong Kong also increased in July, reaching 7,179 mt (up 19 percent from a year ago) valued at $53.1 million (up 4 percent). Through July, exports to Hong Kong remained 7 percent below last year at 45,175 mt, with value down 10 percent to $371.4 million.
July exports to Taiwan, where U.S. beef exports have set seven consecutive annual value records, exceeded last year by 10 percent at 5,989 mt, with value steady at $48.2 million. Through July, exports were 4 percent below last year’s pace in volume (35,090 mt) and 7 percent lower in value ($300.4 million).
“Although there is still a long recovery ahead, the foodservice sectors in Taiwan, Hong Kong and China have rebounded more quickly than most other regions,” Halstrom said. “Phase One has also helped spark importer interest in the Chinese market, where U.S. beef is really just beginning to gain traction. There is unmet demand for high-quality, grain-fed beef in China, especially with Australian supplies tightening, and buyers are anxious to secure U.S. beef.”
Other January-July highlights
Exports to leading market Japan were 3 percent below last year’s pace at 183,420 mt, with value down 2 percent to $1.17 billion. But U.S. beef continues to recapture market share in Japan, climbing from 41 percent last year to 43 percent in 2020—surpassing Australia as the top supplier. U.S. prices for July exports were sharply higher than last year, especially for variety meats and chilled cuts, suggesting that while it takes time to adjust to earlier supply interruptions, continued normalization in prices will help exports regain momentum.
Although July exports to Korea recovered to near-2019 levels, January-July exports were 7 percent below last year’s record pace at 141,113 mt, valued at $997.2 million. U.S. beef is also gaining market share in Korea at the expense of Australia, with U.S. share through July reaching 51.5 percent, up from 49 percent last year.
Canada continues to be a bright spot for U.S. beef in 2020, with exports up 13 percent from a year ago to 64,677 mt, valued at $436.4 million (up 14 percent). Beef variety meat exports to Canada have been particularly strong, climbing 33 percent from a year ago to 5,675 mt, valued at $12.2 million (up 52 percent).
With beef consumption in Mexico being especially dependent on the foodservice and hospitality sectors, COVID-19 restrictions have hit exports hard in 2020. Beef is by far the most expensive protein in Mexico and demand has been negatively impacted by the economic slowdown. Through July, exports were 26 percent below last year in volume (100,230 mt) and 30 percent lower in value ($433.4 million). Variety meat exports have been less heavily impacted, falling 4 percent to 50,204 mt, valued at $123.3 million (down 11 percent).
With Mexico as the main driver, July exports of U.S. lamb posted the largest monthly totals of the year in both volume (3,547 mt, up 115 percent from a year ago) and value ($3.5 million, up 46 percent). July exports also trended higher to Bermuda and Canada.
Through July, lamb exports were 20 percent higher than a year ago at 11,299 mt, but export value ($13.9 million) still trailed last year by 11 percent. — USMEF