November 13, 2019
USMEF: September beef export volume steady with 2018
September exports of US beef were steady with last year in volume but export value trended lower, according to data released by US Department of Agriculture (USDA) and compiled by the US Meat Export Federation (USMEF).
Pork exports were above year-ago levels in September but pulled back from the large totals posted in June, July and August.
September beef exports totaled 109,799 tonnes, essentially even with last year, valued at US$661.3 million (down 4%). Through the first three quarters of the year, beef exports were 2% below last year's record pace in both volume (991,325 tonnes) and value (US$6.1 billion).
Beef export value per head of fed slaughter averaged US$318.54 in September, up significantly from the previous month but still 5% below last year. The January-September average was down 3% to US$310.77. September exports accounted for 14.6% of total US beef production and 11.9% for muscle cuts only, down from 14.8% and 12.4%, respectively, last year. Through the first three quarters of the year, exports accounted for 14.3% of total beef production and 11.6% for muscle cuts, down from 14.6% and 12.1%, respectively, in 2018.
September pork exports increased 13% from a year ago in both volume (202,248 tonnes) and value (US$532.2 million). These results pushed January-September export volume 5% ahead of last year's pace at 1.9 million tonnes, while value increased 2% to US$4.89 billion.
Pork export value averaged US$49.98 per head slaughtered in September, up 3% from a year ago. For January through September, the per-head average was down 2% to US$51.50. September exports accounted for 25.1% of total US pork production, slightly higher than a year ago, and 21.7% for muscle cuts only (down slightly). January-September exports accounted for 26.3% of total pork production and 22.8% for muscle cuts, both up slightly from a year ago.
"While red meat exports face obstacles in some key markets, global demand dynamics are strong and we see opportunities for significant growth in the fourth quarter and into 2020," said USMEF president and CEO Dan Halstrom. "Progress is being made on market access improvements and this makes for a very positive outlook going forward."
Beef export trend to Japan highlights need for tariff relief
Beef exports to leading market Japan continue to reflect the tariff rate gap between US beef and its competitors. September exports were 14% below last year in both volume (24,041 tonnes) and value (US$148.3 million). For the first three quarters of the year, exports to Japan were 4% below last year's pace in volume (241,739 tonnes) and 5% lower in value (US$1.51 billion). The decline was steeper for beef muscle cuts, which were down 10% in volume to 192,676 tonnes, valued at US$1.22 billion (down 9%). Beef variety meat exports to Japan (mainly tongues and skirts) have been a bright spot in 2019, increasing 26% in volume (49,063 tonnes) and 15% in value (US$290.8 million). While these items also face higher tariffs compared to competitors' products, the rate is 12.8% versus 38.5% for US muscle cuts.
"Japan is still delivering excellent value for US beef producers, but tariff relief cannot come soon enough," Halstrom explained, referring to the recently signed US-Japan trade agreement, which is being discussed and considered for approval by the Japanese Parliament. "With a level playing field, the US beef industry will move a wider range of products to our loyal customers in Japan and will definitely capitalise on emerging growth opportunities."
Beef exports to South Korea continue to build on last year's record performance, as September exports climbed 11% from a year ago in volume (21,267 tonnes) and 6% in value (US$151.6 million). For January through September, exports reached 195,557 tonnes (up 8%) valued at US$1.36 billion (up 10%). Korea surpassed Japan as the top value market for US beef muscle cuts, reaching US$1.36 billion through September (up 10% year-over-year). Muscle cut volume to Korea increased 9% to 185,288 tonnes. Korean customs data (January through October) indicate US beef accounts for 56% of Korea's beef imports this year, up from 53% last year.
Fueled by strong demand for variety meat, September beef exports to Mexico were slightly above last year in volume (19,464 tonnes) and 2% higher in value (US$91.2 million). Through the first three quarters of the year, exports to Mexico reached 175,992 tonnes, down 1% from a year ago, while value increased 5% to US$820.7 million. Mexico is the leading destination for beef variety meat and September was an especially strong month, as variety meat exports climbed 26% from a year ago in volume (9,018 tonnes) and 51% in value (US$26.4 million). While January-September variety meat exports were steady year-over-year in volume (71,522 tonnes), value jumped 16% to US$192.5 million.
January-September highlights for U.S. beef include:
- Beef exports to Taiwan remain well ahead of last year's record pace, climbing 10% in volume (47,868 tonnes) and 6% in value (US$427.3 million). In just nine months, exports to Taiwan have already surpassed all full-year totals posted before 2018;
- Led by impressive growth in Indonesia, beef exports to the ASEAN region were 31% ahead of last year's pace in volume (44,481 tonnes) and 15% higher in value (US$214.5 million). Exports to Indonesia soared 74% in volume (16,984 tonnes) and were 42% higher in value (US$60.5 million). Demand for beef variety meat increased at an even more rapid pace in Indonesia, jumping 83% in volume (9,207 tonnes) and 78% in value (US$18.4 million);
- Strong September results in Central America pushed beef exports 8% above last year's pace in volume (11,351 tonnes) and 13% higher in value (US$64.6 million), led by strong growth in Guatemala and Panama;
- Although volume slowed in September, beef exports to the Dominican Republic remained on a record pace, increasing 39% from a year ago in volume (6,594 tonnes) and 32% in value (US$53.2 million).
Rebuilding effort continues for US pork in Mexico; exports to China/Hong Kong moderate
Since Mexico removed its 20% retaliatory duty on US pork in late May, exports have rebounded significantly but not yet to the record-large, pre-tariff levels posted in 2017 and early 2018. September exports to Mexico were down 1% year-over-year in volume (56,467 tonnes), but value increased 7% to US$97.6 million. Through the first three quarters of the year, exports were down 10% in volume (529,776 tonnes) and 9% in value (US$919.4 million).
"Although the US industry has made rebuilding pork demand in Mexico a top priority, there is definitely a lingering effect from the retaliatory duties, which were in place for nearly a full year," Halstrom said. "While it is a great relief to once again move pork to Mexico duty-free, ratification of the US-Mexico-Canada Agreement would certainly help the psychology of the market and bolster our major customers' confidence in the US supply chain."
Although dramatically higher than a year ago, September pork exports to China/Hong Kong pulled back from the large totals posted over the previous two months as China's domestic pork supplies felt increasing pressure from African swine fever (ASF). September volume was 51,192 tonnes, up 158% from a year ago, while value increased 123% to US$115.6 million. For January through September, exports to China/Hong Kong were up 47% in volume (407,514 tonnes) and 25% in value (US$833.5 million).
"Obviously, we are anxious to learn the details of the phase 1 agreement between the US and China and hopeful that it removes obstacles for US pork," Halstrom said. "Exports to China/Hong Kong are improving, but certainly not to the level that could be achieved if US pork returned to normal tariff levels and if the US-China agreement addresses non-tariff barriers as well."
The US pork industry stands to benefit significantly from the US-Japan trade agreement, which will bring tariffs on US pork in line with those imposed on major competitors such as Canada and the European Union. Japan remains the leading value destination for US pork, but September volume was down 8% to 27,812 tonnes and value fell 5% to US$116.2 million. Through September, exports to Japan trailed last year's pace by 6% in both volume (278,352 tonnes) and value (US$1.14 billion).
January-September highlights for US pork include:
- While September exports slowed to mainstay market Colombia and to the region as a whole, pork exports to South America were still 24% above last year's record pace in volume (114,535 tonnes) and 26% higher in value (US$287.9 million). Chile has been South America's growth pacesetter in 2019, with exports climbing 60% in volume (33,992 tonnes) and 53% in value (US$97.6 million). The US is now Chile's largest pork supplier and opportunities continue to expand as more Chilean pork is exported to China;
- A strong September performance pushed pork exports to Central America 16% above last year's record pace in volume (67,982 tonnes) and 19% higher in value (US$165.1 million). Exports trended higher to Honduras, the largest Central American destination for US pork, and Guatemala, Panama, Costa Rica and Nicaragua have achieved excellent growth in 2019;
- Exports to Oceania continue to reach new heights, climbing 37% from a year ago in volume (85,557 tonnes) and 33% in value (US$243 million), with impressive growth in both Australia and New Zealand.
While ASF has impacted pork production in Southeast Asia, especially in Vietnam but more recently spreading into the Philippines, lower domestic prices have affected the ASEAN region's demand for imports. US shipments to the ASEAN dropped sharply in September and through the third quarter trailed last year's pace by 15% in volume (41,905 tonnes) and 23% in value (US$95 million). However, pork and hog prices have started to trend higher in Vietnam and the European Union's pork exports to Vietnam were record-large in August, suggesting potential for larger US exports in coming months.