January 19, 2009

The US Meat Export Federation last week said red meat exports continued at a strong pace through November, but a closer look at the data suggest late-year declines in demand.

 

In November, pork exports were up 20 percent from a year earlier, while beef shipments were up 9 percent, the USMEF said. For the first 11 months of 2008, pork and pork variety meat exports were 61 percent higher than 2007 at 1.899 million tonnes. For the period, pork exports were valued at US$4.5 billion for an increase of 59 percent.

 

Beef exports for the first 11-month period were up 37 percent to 582,270 tonnes, with variety meat exports up 18 percent to 331,479 tonnes, the USMEF said. Total beef exports of 913,739 tonnes were up 29 percent and were valued at US$3.37 billion for an increase of 40 percent.

 

Ron Plain, an agricultural economist at the University of Missouri who compiles his own data, said domestic demand for pork, which was strong in 2007, started 2008 rather weak and remained tepid throughout the year. Domestic pork demand was thought to be down 2 percent in December.

 

Plain blamed the weakening US economy for a shift in consumer demand toward the cheaper cuts of pork, which reduces the total value and hinders the ability to sell the better cuts.

 

However, export demand for pork was strong at the start the year and was "just awesome" in the second quarter, Plain said. Export demand for pork has declined since June and dropped below the year-ago level in November with a 2 percent decline, he said.

 

Earlier in the year, China was a big buyer of pork, but the buying virtually stopped, Plain said. China had disease-related production problems in 2007, and it was buying to supply the Olympics, and both factors faded around the same time.

 

Domestic beef demand has been weak all year, Plain said. Demand for all months lagged year-earlier levels. An economy that was sliding into recession kept consumers on the ropes and leaning toward lower-cost items like ground beef, making it harder to sell the whole carcass and reducing beef demand.

 

Export demand, however, strengthened through the year, Plain said. November was up 12 percent from a year earlier, although August and September were the strongest months.

 

Plain credited the re-emergence of South Korea as a US beef customer for the increase in export demand for the product.

 

Plain said he expected beef export demand to grow some more in 2009, although not to the extent it did in 2008 because South Korea now is back in the mix of export customers. He wasn't as optimistic about the prospects for domestic beef or pork demand since he sees no quick end to the current recession.

  

The US Department of Agriculture estimated this week's cattle slaughter at 608,000 head, compared with 601,000 a week ago and 653,000 a year ago. Year-to-date cattle slaughter is down 19.8 percent.

 

The week's hog slaughter estimate was 2.325 million head, down from 2.386 million a week ago and 2.419 million a year ago. Year-to-date hog slaughter is down 17.1 percent.

 

The USDA estimated total beef, pork and lamb production for the week at 952.6 million pounds. Last week's output was 957.6 million pounds, and the year-ago figure was 1.004 billion pounds.

 

Broiler/fryer slaughter for the week was estimated at 166.816 million head, compared with 127.532 million a week ago and 168.128 million a year ago.