May 14, 2015


US pork, beef exports picked up in March after resolution at West Coast ports



In late February this year, dissatisfied workers at the US' West Coast ports had finally reached a tentative labour contract with port authorities, thus ending nine months of disagreement over contractual issues.


With the resolution, cargo volumes have returned to normal levels since then. Those were held back by congestions during the negotiation period between the workers' union, International Longshore and Warehouse Union, and the Pacific Maritime Association.


The breakthrough had contributed to some positive results for March's red meat exports following a slow start in 2015.


Based on USDA data, March's pork exports reached their highest in 11 months at 191,041 tonnes. The volume was 9% lower year-on-year but a 10% rise from February. At US$495.3 million, the value was up 5% from the previous month, though an 18% drop from a year ago.


Beef deliveries were down 7% compared to March 2014. Still at 86,774 tonnes, the volume was a 5% rise over February this year. While the value for those exports recorded a 2% increase year-on-year, at US$527.3 million, it was also a mild drop from February.


"The announcement of the new labor contract certainly improved the business climate," said Philip Seng, the president and CEO of the US Meat Export Federation (USMEF).  "The US meat industry was able to reassure Asian buyers that the worst of the crisis was behind us and that they could once again count on the US to fulfill its role as a reliable supplier."


Seng added that the recent developments at West Coast ports are especially critical in solidifying confidence from customers buying chilled pork and beef which require immediate delivery due to product shelf life.


"We must aggressively defend the customer base the US industry has worked so hard to build over the years by reaffirming the value and quality delivered by US red meat," he said.


At the moment, large volumes of cheaper products from other countries are wrestling against the US' competitive position in some of its key export markets. Other factors, such as a strong US dollar and market access restrictions in China and Russia, also lend to delivery difficulties.


"Closure of the Russian market to European pork continues to impact all major pork suppliers, as the EU has focused very aggressively on alternative markets in Asia," Seng said.


He also expected a possible slowdown in Australia's beef production which did not happen in the first quarter this year.


Pork exports in March made up for 25% of overall output and 21% solely for muscle cuts. The latter is the biggest percentage since July 2014.


Export value per head slaughtered in March fell by nearly US$20 from a year ago, to a price of US$50.10. During the first quarter, per-head export value also declined, by 19% from 2014 and to US$49.48. Additionally, the price is a 7% decrease from the first quarter of 2013.


In the meantime, pork deliveries to Mexico in the first quarter reached 179,507 tonnes, a 7% rise over 2014. However, value dipped 6% to US$321.2 million.


South Korea reigned as the top export market in the first three months of 2015, with a year-on-year increase of 43% in volume (57,376 tonnes) and 55% in value (US$180.4 million).


Canada saw an increase of 2% in imports, to 48,905 tonnes, while value maintained at around US$192.4 million seen last year.  


Japan, China and Hong Kong witnessed lower pork imports from the US in March. In the first quarter, deliveries bound for Japan fell by 13% to 103,921 tonnes in volume while value dropped 19% to US$386.6 million in value.


Although the biggest in 12 months, March deliveries to China and Hong Kong slid to 67,754 tonnes, a 40% decrease. The first quarter value also suffered a 42% drop to US$152.1 million.


In South America, the Dominican Republic, Honduras, Guatemala and Panama saw year-on-year growth in pork imports from the US, with exception to Colombia and Chile.


Beef deliveries in March constituted 13% of overall output and 10% solely for muscle cuts; the percentages represented drops from 14% and 11%, respectively, from March 2014.


At US$284.30, the export value per head of fed slaughter increased 5% from 2014. Per-head export value rose by 9% to US$290.32 in the first quarter.


Beef exportation to Japan is astoundingly positive this year despite challenges posed by the weak yen currency and the West Coast situation as well as the recent Japan-Australia Economic Partnership Agreement which benefitted Australia's beef exports to the country.


In the first three months of 2015, exports to Japan rose to 48,347 tonnes, a 4% increase. Value also jumped by 11%, to US$322.8 million.


Deliveries to Mexico fell by 1% to 56,582 tonnes, albeit a 4% rise in value to US$285 million.


Beef exports to South Korea started slowly in the early days of 2015 but maintain progress in March. In the first quarter, volume suffered a 4% dip from 2014, to 27,624 tonnes. However, value went up 2% to US$204.1 million.


On the other hand, Taiwan, which began strongly this year, was slowing down in March, with its first quarter volume down by 10% to 6,382 tonnes. Value rose 11% to US$641.1 million.


Exports to Hong Kong in the first quarter plunged 21% in volume, to 27,841 tonnes, and 6% in value to US$211.9 million.

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