June 10, 2013

 

US beef exports increase in April

 

 

US beef exports edged higher in April than the previous month but still lagged behind year-ago levels.

 

This is according to statistics released by USDA and compiled by the US Meat Export Federation (USMEF), contractor to the Beef Checkoff Programme.

 

While the overall trend for exports remains sluggish, driven by market access issues and oversupply of domestic product in key markets, several leading trading partners showed positive signs in April.

 

Beef exports to Japan were up sharply as the island nation regained its ranking as the no. one market for US beef for the first time since 2003. At the same time, Hong Kong maintained its rapid growth pace and Taiwan continued its rebound from beta agonist-related issues that slowed exports last year.

 

While the boost in exports to Japan is encouraging - up 49% in volume and 44% in value versus the first four months of 2012 - USMEF President and CEO Philip Seng cautioned that Japan has a safeguard in place that will increase tariffs if beef import volumes rise too quickly. This safeguard, which was utilised by Japan in 2003 under similar circumstances, remains an important consideration for US exporters and Japanese importers.

 

April beef export volume of 190 million pounds was down 9% from a year ago and export value was down 7% to US$434.8 million. For January through April, beef exports were 2% higher in value (US$1.75 billion) despite a 5% decline in volume (756 million pounds).

 

Russia's suspension of imports of US beef, which officially closed the market February 11, continues to hamper overall performance. USMEF estimates this trade impasse, which is related to Russia's enforcement of a zero-tolerance policy for beta agonist use, has cost the US industry about US$97 million in beef export value so far in 2013.

 

"Along with our lack of access to sell beef in mainland China, this is the biggest barrier we face in terms of market access," said Seng. "One often overlooked factor is the effect this suspension has on the price US products command in markets other than Russia. For example, beef livers to Egypt have increased in volume, but the value is down. The impact is much broader than many analysts realise at first glance."

 

Through April, beef exports equated to 9% of US muscle cut production and 12% including variety meat - down from last year's ratios of 9.6% and 12.7%. Export value equated to US$217.54 per head of fed slaughter, up 3% from the same period last year.

 

The US beef industry continues to capitalise on its recently expanded access to Japan. With April exports more than doubling last year's performance, exports to Japan moved 49% higher in volume (132 million pounds) and 44% higher in value (US$382.3 million) for the year. This made Japan the leading destination for US beef in both volume and value, overtaking Canada.

 

"Many observers felt USMEF's growth projections for Japan were overly bullish," Seng said. "But we were keenly aware of the unmet demand from existing buyers and the opportunities to secure new business once we had a wider supply available. This shows once again the importance of having experienced staff on the ground who know how to direct marketing resources in a way that will maximise results."

 

US beef exports to Canada slowed in April, though volume (122 million pounds, +10%) and value (US$355,321, +15%) remained higher for the year. Exports to Hong Kong, which also recently expanded access for US beef to include bone-in cuts and some products from cattle over 30 months of age, soared by 87% in volume (61 million pounds) and 79% in value (US$158.6 million) in the first four months of the year. Taiwan also continues to perform extremely well in 2013, with exports beating last year's pace by 84% in volume (23.9 million pounds) and 129% in value (US$84.6 million). While exports to Taiwan slowed in 2011 and 2012 due to an impasse over beta agonists, this year's January to April exports exceed the pace achieved when this market was performing at its peak.

 

In addition to the Russia closure, beef exports were hampered by slow demand in Mexico and South Korea. In the case of Mexico, the price point relative to other competing proteins continues to be an issue that has proven difficult to overcome as exports declined 22% in volume (125 million pounds) and 25% in value (US$242.7 million) compared to a year ago. In Korea, the main issue is an oversupply of domestic protein, which has created a difficult climate for imported products. Exports to Korea were down 20% in volume (83 million pounds) and 9% in value (US$199.7 million). Exports also slumped to the ASEAN region due to weak demand in Vietnam and on-going trade barriers in Indonesia. This was partially offset by a strong performance in the Philippines, where exports were up 16% in volume (10 million pounds) and 35% in value (US$21.3 million).