February 9, 2017

USMEF: Strong finish for 2016 red meat exports; new volume record for pork


US pork and beef exports wrapped up an excellent 2016 performance with very strong December results, according to statistics released by USDA and compiled by the US Meat Export Federation (USMEF).

Pork export volume reached a record 2.31 million tonnes in 2016, up 8% year-over-year and 2% above the previous high in 2012. Export value increased 7% from a year ago to US$5.94 billion. December pork exports totaled 222,635 tonnes, up 18% year-over-year, valued at US$564.2 million, up 20%.

Exports accounted for 25.8% of total 2016 pork production and 21.5% for muscle cuts - up from 24.2% and 20.8%, respectively, in 2015. December ratios were 28% for total production and 23% for muscle cuts only - up significantly from December 2015. Export value per head slaughtered averaged US$50.20 in 2016, up 4% from the previous year. The December average was US$56.06, up 24%.

Beef exports increased 11% in volume (1.19 million tonnes) and 1% in value (US$6.34 billion) from 2015. December exports totaled 116,847 tonnes, up 24% year-over-year. This was the largest monthly volume since July 2013 and the largest ever for December. Export value was US$619.1 million in December, up 22%.

Exports accounted for 13.7% of total beef production in 2016 and 10.5% for muscle cuts - up from 13.1% and 10%, respectively, in 2015. December exports accounted for 15.6% of total December beef production and 12.1% for muscle cuts only - each up more than two percentage points from a year ago and the highest since 2011. Export value per head of fed slaughter averaged US$262.17, down 6% from 2015, but the December average was US$301.97 - up 14% and the highest in nearly two years.

Pork to Mexico sets fifth straight volume record; China/Hong Kong record-large

A remarkable second half pushed 2016 pork export volume to Mexico to its fifth consecutive record at 730,316 tonnes - breaking the previous record by 2%. Export value to Mexico totaled US$1.36 billion, up 7% year-over-year and the second-highest on record, trailing only the US$1.56 billion mark reached in 2014.

"At this time of record-large pork production, it would be hard to overstate the importance of Mexican demand to the US industry," said Philip Seng, USMEF President and CEO. "This is especially true for hams, as we are locked out of Russia – once a large destination for US hams – and China's demand for imported hams has moderated in recent months. So now, more than ever, we need strong demand from our key customers in Mexico, and they have responded with extraordinary results. December exports to Mexico accounted for nearly US$16 per head, and that's absolutely critical to the entire US pork supply chain."

Though down from the high levels seen earlier in the year, December pork exports to China/Hong Kong were still up 40% year-over-year in volume (47,242 tonnes) and 42% higher in value (US$96 million). For the full year, exports to China/Hong set a new volume record of 544,943 tonnes (up 61%) and broke the US$1 billion mark for the first time (US$1.07 billion, up 53%).

Other 2016 highlights for US pork exports

Japan remained the leading value destination for US pork, though exports fell 5% in volume (387,712 tonnes) and 2% in value (US$1.56 billion) compared to 2015. However, chilled exports to Japan set a new record of 218,211 tonnes, up 8%.

Led by a record performance in Central America and a fourth-quarter surge in Colombia and Chile, exports to the Central/South America region increased 11% in volume (135,954 tonnes) and 9% in value (US$334.5 million).

Pork shipments increased to both Australia and New Zealand, as export volume to Oceania reached 69,963 tonnes (up 10%) valued at US$197.3 million (up 3%).

Exports to the Dominican Republic set another record in 2016, topping the previous year's totals by 10% in volume (25,591 tonnes) and 6% in value (US$56.4 million).

Fueled by increases in China/Hong Kong and Canada and steady exports to Mexico, pork variety meat exports jumped 20% in volume to 523,199 tonnes and 24% in value to US$999 million - just short of the record levels reached in 2014.

Asian markets drive strong beef export growth

Driven by strong demand for higher-value chilled cuts, beef exports achieved new value records in South Korea and Taiwan in 2016, and rebounded strongly in Japan.

In South Korea, December beef exports soared by 81% in volume (20,333 tonnes) and 88% in value (US$130 million) from a year ago, capping a remarkable year in which exports totaled 179,280 tonnes (up 42%) valued at US$1.06 billion - up 31% from a year ago and breaking the previous value record by more than 20%. South Korea's per capita beef consumption set a new record in 2016 of 34 pounds (carcass weight) - so the US not only gained market share, but also capitalised on the market's overall growth.

Beef exports to Taiwan were also strong in December, with export value (US$43.3 million) hitting its highest level ever. Full-year exports to Taiwan were up 25% in volume to 44,053 tonnes and 14% in value to US$362.8 million.

2016 exports to Japan were the largest of the post-BSE era at 258,653 tonnes, up 26% year-over-year. Export value totaled US$1.51 billion, up 18%. Chilled beef exports to Japan totaled 112,334 tonnes, up 44% from 2015.

"In addition to the strength of the US dollar, US beef overcame other severe challenges in these north Asian markets and achieved remarkable results," Seng said. "Despite facing higher tariff rates in Japan compared to Australian beef, US beef displaced its competition and won back significant market share. And the investment the US industry made to rebuild consumer confidence in Korea is paying tremendous dividends, especially in the retail sector. We're seeing US beef featured regularly by retailers who were once reluctant to carry the product."

Other 2016 highlights for U.S. beef

Beef exports to Mexico increased 7% year-over-year in volume to 242,373 tonnes, though value fell 11% to US$974.9 million. While challenged by a weak peso, Mexico remains a key destination for muscle cuts such as shoulder clods and rounds, as well as for beef variety meat.

Led by strong growth in Chile and a doubling of exports to Colombia, beef exports to South America increased 6% in volume to 22,810 tonnes, valued at US$92.7 million (down 2%). The region should see further growth in 2017 with the reopening of Brazil.

Exports to Central America were up 7% in volume (12,745 tonnes) with top market Guatemala up 1% and exports to Honduras nearly doubling. Export value was US$71.8 million, up 1%.

Fueled by a resurgence in Indonesia and solid growth in Vietnam, beef exports to the ASEAN region were up 41% in volume (29,920 tonnes) and 15% in value (US$156.9 million). Indonesia expanded access for US beef in early August. Despite being closed to many products through the first seven months of the year, US exports to Indonesia set a new value record of US$39.4 million.

Beef variety meat exports increased 10% in volume (341,433 tonnes) and 4% in value (US$902.2 million) in 2016. Liver exports increased 12% to 81,727 tonnes and reached a broader range of markets. While liver exports to Egypt - the largest destination for US livers - increased 4%, further growth was achieved in Central and South America and with the reopening of South Africa to US beef.


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