March 17, 2020

 

US pork, beef exports rise higher in 2020

 

 

Following a record-breaking performance in 2019, US pork and beef exports maintained a torrid pace in January, according to data released by USDA and compiled by the US Meat Export Federation.

 

January pork exports cooled slightly from the volume and value records established in December 2019, but still far exceeded year-ago levels. Both the January export volume of 273,603 tonnes, up 36% on-year, and export value (US$738.7 million, up 50%) were the second highest on record. Export value per head slaughtered was US$62.53, up 40% from a year ago. Exports accounted for 29.8% of total pork production and 27.4% for muscle cuts only, up substantially from last January's percentages (23.6% and 20.3%, respectively).

 

Beef exports posted more modest growth in January, increasing 2.5% from a year ago in volume (107,374 tonnes) and 5% in value (US$672.7 million). But beef muscle cut exports were the highest ever for the month of January at 81,342 tonnes, up 4% from a year ago, while muscle cut value increased 5% to US$589.2 million. Export value per head of fed slaughter was US$302.93, up 3% from a year ago. Exports accounted for 13.1% of total beef production, down slightly from a year ago, and 10.6% for muscle cuts only (steady with January 2019).

 

Release of the January export data comes as coronavirus is dominating news headlines, including those related to global trade. USMEF President and CEO Dan Halstrom said the virus has had an impact on red meat exports, which will likely be more evident in February and March data, but a number of supply and demand fundamentals and market access improvements have underpinned continued strong export volumes.

 

"The first quarantine actions in China were taken in late January and the calendar had turned to February before coronavirus became a major health concern in countries such as South Korea and Japan," Halstrom said. "But despite logistical challenges, a severe decline in tourism and a notable impact on sit-down dining, overall demand for red meat in these markets is quite resilient. Retail meat sales have remained strong and both retailers and restaurateurs are utilising e-commerce and delivery services at unprecedented levels. While it's definitely a challenging situation, the Asian food industry is adapting to these conditions and finding creative ways to accommodate consumers."

 

Pork exports to China/Hong Kong continued on a blistering pace in January, easing somewhat from the record volume reached in December but still increasing 263% from a year ago to 97,002 tonnes and climbing 361% in value to US$245.3 million. The on-year increase was even more astonishing for pork muscle cuts, which were up 814% to 76,281 tonnes, valued at US$194.7 million (up 1,297%). January exports included a significant share of carcasses (boxed primals), which totalled 35,358 tonnes, up from zero last year. Exports of bone-in hams and shoulders were 7,750 tonnes, up 569%.

 

Exports to Mexico, which were hampered by retaliatory duties in the first five months of 2019, increased 6% from a year ago in volume (70,460 tonnes) and jumped an impressive 40% in value to $134.7 million. Chilled bone-in ham and shoulder cuts remained the largest category for Mexico, totalling 42,542 tonnes, up 11% from last year and accounting for 75% of the chilled/frozen cut volume. Unit export values for pork cuts exported to Mexico were up 36% from last January.

 

January shipments to Japan, the perennial value leader for US pork exports, were down 4% from a year ago in volume (31,578 tonnes) and 2% lower in value (US$132.6 million). But Japanese import data paint a brighter picture, showing imports of chilled US pork were up 13% to 17,890 tonnes. Imports of ground seasoned pork were record-large at 12,944 tonnes, up 95%, illustrating the importance of a restored level tariff playing field. USMEF projects an upward trend in Japan in 2020, due in part to tariff relief provided in the new US-Japan trade agreement. The next round of tariff reductions will come April 1, when the Japanese fiscal year begins.

 

The value of US beef exports to Taiwan was record-high for the seventh consecutive year in 2019, and exports are off to a great start in 2020. January exports to Taiwan increased 24% from a year ago to 5,226 tonnes, valued at US$43.5 million (up 18%). The US dominates Taiwan's chilled beef export market, capturing 75% market share last year and 83% in January 2020.

 

January beef shipments to Mexico were up 4% from a year ago to 21,992 tonnes, while value jumped 15% to US$117.2 million. Mexico is the largest destination for beef variety meat exports, which increased 9% to 9,438 tonnes, valued at US$26.7 million (up 14%).

 

Coming off a record year in 2019, exports to South Korea remained strong in January, though volume was down slightly from a year ago (17,794 tonnes, down 1%) and value dipped 3% to US$130.6 million. However, US beef continues to capture greater market share in Korea and the outlook remains positive for export growth in 2020, despite Korea's current economic challenges.

 

Beef exports to leading market Japan, which are also benefiting from lower tariff rates this year, declined 3% from a year ago in January to 25,205 tonnes, valued at US$158.1 million (down 5%). On a more positive note, import data show chilled beef volume to Japan increased 14% to 10,686 tonnes. The tariff rate for US beef muscle cuts dropped from 38.5% to 26.6% on January 1 and will decline to 25.8% on April 1, the same rates imposed on major competitors in Japan.