Cattle and beef markets are not independent from global markets

Total U.S. red meat and poultry production is expected to increase in 2018. Recent tariff wars could have an impact as any slowdown in meat exports will add pressure to domestic meat prices.

August exports of U.S. beef and pork muscle cuts were above last year’s strong volumes, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Variety meat exports were lower than a year ago, due in part to the lack of available labor required to harvest and export some items.

Led by record-large demand in South Korea and Taiwan, beef muscle cut exports were the largest in more than a year at 89,148 metric tons (mt), up 3.5 percent year over year, while export value increased slightly from a year ago to $611 million. Combined beef/beef variety meat exports were 109,752 mt in August, down 4.5 percent from a year ago. Export value was $673.8 million, down 2 percent from a year ago but the highest since March.

For January through August, beef muscle cut exports were 6 percent below last year’s pace in volume (627,248 mt) and 9 percent lower in value ($4.38 billion). Beef/beef variety meat exports were down 8 percent to 808,659 mt, valued at $4.95 billion (down 9 percent).

Beef export value per head of fed slaughter averaged $302.82 in August, up 1 percent from a year ago. The January-August average was down 4 percent to $297.96. August exports accounted for 13.7 percent of total beef production and 11.9 percent for muscle cuts, compared to 14 percent and 11.3 percent, respectively, last year. The January-August ratios were 13.3 percent and 11.1 percent, down from 14.2 percent and 11.6 percent a year ago.

Pork exports

August exports of U.S. pork muscle cuts were 180,369 mt, up 1 percent from a year ago, though value was down 11 percent to $448.7 million. Combined pork/pork variety meat exports were down 2 percent in volume (217,893 mt) and 10 percent lower in value ($528 million). But pork exports remain on a record pace in 2020, with January-August muscle cut exports up 22 percent from a year ago to 1.68 million mt, valued at $4.45 billion (up 20 percent). Pork/pork variety meat exports were up 17 percent in volume to just under 2 million mt, with value up 18 percent to $5.13 billion.

Pork export value per head slaughtered averaged $47.47 in August, down 12 percent from a year ago, but the January-August average was still up 15 percent to $59.59. August exports accounted for 25.9 percent of total pork production and 23.1 percent for muscle cuts, down from 27.2 percent and 23.7 percent, respectively, last year. January-August ratios remained well above last year at 30 percent and 27.3 percent (compared to 26.4 percent and 23 percent in 2019).

“The upward trend in muscle cut exports is very encouraging and especially critical as beef and pork production continue to rebound from the interruptions earlier in the year,” said USMEF President and CEO Dan Halstrom. “Maintaining variety meat volumes has been especially challenging this year but we continue to expand and develop destinations for these items, which are essential to maximizing carcass value.”

Halstrom said COVID-19 continues to impact many countries, but the recovery in foodservice is well underway in China and Taiwan and there is progress in other main markets, including Japan and Korea. Even as foodservice activity increases, strong retail and online sales persist.

“Record beef shipments to Korea, Taiwan and China show the kind of rebound U.S. beef can achieve as the foodservice sector gradually recovers and adapts, and we are excited to see demand strengthen further entering the fourth quarter,” he said.

August beef highlights

South Korea was the pacesetter for U.S. beef exports in August, setting new records for volume (27,149 mt, up 22 percent from a year ago) and value ($183.1 million, up 16 percent). For January through August, exports to Korea were still down 3 percent in volume (168,262 mt) and 6 percent in value ($1.18 billion) from last year’s record pace, due in large part to COVID-19-related impacts on the U.S. supply chain, as well as restrictions on Korea’s foodservice operations. Korea gradually eased restrictions this summer but recently reimposed some social distancing measures, including limits on gatherings and banquets, which have a negative impact on demand for loin cuts.

Beef exports to Taiwan continued to rebound in August, reaching a record 7,439 mt (up 20 percent from a year ago) valued at $63.8 million (up 8 percent). These results pulled January-August exports within 1 percent of last year’s record pace at 42,529 mt. While export value was down 5 percent at $364.2 million, a strong finish in 2020 could still push exports to Taiwan to an eighth consecutive value record.

August beef exports to Japan were 26,150 mt, down 9 percent from a year ago, valued at $155 million (down 6 percent). Through August, exports to Japan were down 4 percent in volume (209,570 mt) and 2 percent in value ($1.37 billion). This was due mainly to a sharp decline in variety meat exports, although variety meat volumes have rebounded from the lows posted in May and June, following U.S. supply chain disruptions. For muscle cuts only, January-August exports to Japan increased 4 percent from a year ago to 180,592 mt, valued at $1.08 billion (down 2 percent), with beef short plate exports accounting for much of this growth.

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

Beef exports to China set another new record in August at 3,886 mt valued at $28.3 million, more than quadrupling last year’s totals. January-August exports to China were 13,148 mt (up 134 percent from a year ago) valued at $97.3 million (up 118 percent), already exceeding full-year totals from 2019. Exports to the China/Hong Kong region increased 7 percent to 64,644 mt, with value up 1 percent to $518.3 million.

Following a down year in 2019, beef exports to Canada continue to gain momentum, reaching 74,387 mt (up 13 percent from a year ago) valued at $505.7 million (up 14 percent).

Exports to Africa, a growing destination for beef livers and other variety meats, rebounded in August at 1,733 mt (up 18 percent from a year ago). Through August, exports to Africa increased 56 percent in volume (18,729 mt) and 35 percent in value ($15.8 million), led by growth in South Africa, Cote d’Ivoire, Gabon, Angola and Ethiopia.

Exports to Indonesia were 2,644 mt in August, up 24 percent from a year ago, with muscle cut exports setting a new record at 1,837 mt (up 99 percent). January-August exports totaled 14,208 mt, down 8 percent from last year’s record pace, valued at $50.1 million (down 1 percent).

Foodservice restrictions and a steep decline in tourism continue to weigh heavily on beef exports to Mexico, though July and August volumes were up sharply from the May low. Through August, shipments to Mexico were down 28 percent from a year ago to 112,598 mt, valued at $493.8 million (down 32 percent). Mexico is still the largest volume destination for U.S. beef variety meats, though shipments through August were down 9 percent from a year ago in volume (56,611 mt) and 16 percent lower in value ($139.4 million).

Lamb exports remain solid

Though down from the large totals posted in July, U.S. lamb exports in August were the second largest of 2020 in both volume (3,129 mt, up 162 percent from a year ago) and value ($3.04 million, up 65 percent). Through August, exports climbed 36 percent above last year to 14,428 mt, though value was down 3 percent to $17 million. Mexico continues to be the main growth driver for U.S. lamb, but muscle cut exports also trended higher year over year to Bermuda, Hong Kong, Japan and Egypt. — USMEF

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