Beef Exports Below Last Year
Source: U.S. Meat Export Federation (USMEF)
October 7, 2019
August beef exports totaled 114,119 mt, a 4% decline from last year’s large volume, while export value ($690.3 million) was down 8%. January-August beef exports were slightly below last year’s record pace, declining 2% in volume (881,526 mt) and 1% in value ($5.44 billion).
Beef export value per head of fed slaughter averaged $298.94 in August, down 7% from a year ago, while the January-August average was down 3% to $309.85. August exports accounted for 14% of total U.S. beef production and 11.3% for muscle cuts only, down from 14.3% and 12.2%, respectively, last year. Through the first eight months of the year, exports accounted for 14.2% of total beef production and 11.6% for muscle cuts, down from 14.6% and 12.1%, respectively, in 2018.
U.S. beef exports cool in August, but remain on strong pace
After setting new value records in June and July, U.S. beef exports to South Korea slowed 9% from a year ago in August to 22,307 mt, while value dropped 11% to $157.4 million. But for January through August, exports to Korea were still 8% ahead of last year’s record pace in volume (174,290 mt) and 10% higher in value ($1.26 billion). Korean import data through August showed double-digit growth for U.S. beef in the top two cut categories: short rib and short plate/brisket. The United States accounted for more than 55% of Korea’s chilled/frozen beef import volume, up from 53% in the first eight months of 2018.
Similar to pork, the U.S. beef industry looks forward to gaining tariff relief in leading market Japan, where August exports slipped 15% from a year ago to 28,646 mt. Value was down 22% to $164.3 million, although it is important to note that exports in August 2018 were a post-BSE record $209.3 million. For January through August, exports to Japan were 3% below last year’s pace in volume (217,698 mt) and 4% lower in value ($1.36 billion). Beef variety meat exports to Japan (mainly tongues and skirts) have been a bright spot in 2019, increasing 31% in volume (44,617 mt) and 18% in value ($260 million). U.S. tongues and skirts face higher duty rates than competitors’ products but are tariffed at 12.8% compared to 38.5% for U.S. muscle cuts.
“The U.S. beef industry is extremely excited at the prospect of lower tariffs in Japan, as 38.5% is the highest rate assessed in any major market,” Halstrom said. “As we’ve seen in Korea, where the tariff rate was once 40% but has been reduced by more than half, lower tariffs make U.S. beef even more affordable for a wider range of customers. While the agreement still needs parliamentary approval in Japan, importers are already enthused and preparing for long-awaited tariff relief.”
January-August beef exports to China/Hong Kong fell 24% from a year ago in volume (60,259 mt) and 20% in value ($510.7 million). Several factors have impacted U.S. exports to the region, including street protests in Hong Kong that have slowed commerce and tourism. While supermarket sales remain strong in Hong Kong, the disruption has been particularly hard on the restaurant sector. Although China remains a small destination for U.S. beef and exports are hampered by China’s retaliatory duties, January-August volume increased 23% from a year ago to 5,625 mt, valued at $44.7 million (up 12%).
January-August highlights for U.S. beef include:
· Exports to Mexico, the third-largest international market for U.S. beef, were slightly lower than a year ago in volume (156,528 mt, down 1%), but value increased 5% to $729.5 million. Beef variety meat exports to Mexico were down 3% from a year ago to 62,504 mt, but commanded better prices as export value increased 12% to $166 million.
· Although beef exports to Taiwan were modestly lower year-over-year in August, January-August exports were still 10% percent above last year’s record pace in volume (42,785 mt) and 7% higher in value ($383.9 million).
· Led by surging demand in Indonesia and solid growth in the Philippines and Vietnam, beef exports to the ASEAN region were 27% above last year’s pace in volume (37,206 mt) and 12% higher in value ($180.6 million).
· Strong August results in Central America pushed exports 4% above last year’s pace in volume (9,898 mt) and 10% higher in value ($56.7 million), led by a strong performance in Panama and steady growth in Guatemala and Honduras.
· Beef exports to the Dominican Republic continue to reach new heights, as volume increased 45% from a year ago to 6,060 mt, while value climbed 35% to $48.6 million.
Halstrom noted that the temporary loss of a major processing plant to a fire likely had a negative effect on August exports, but he does not expect to see a lasting impact.
“Beef supplies are tight throughout the world but the U.S. maintains a supply advantage, as production is expected to be record-large in 2020,” he said. “Both domestic and international demand for U.S. beef remains strong, and there is significant potential for further export growth, especially once the U.S.-Japan agreement is implemented.”
Emerging markets strong for U.S. pork, even as exports rebound to China and Mexico …
Lamb exports trend lower in August …
more, including charts