November 10, 2020
USMEF: Pork exports remain on record pace through September; beef exports trend lower
September exports of US pork increased 10% year-over-year, keeping 2020 exports on a record pace, according to data released by USDA and compiled by the US Meat Export Federation (USMEF).
Beef exports were fairly steady with last year in major Asian markets but trended lower overall.
Pork exports reached 222,475 tonnes in September, with value increasing 6% to US$563.2 million. Through the first three quarters of the year, exports were 16% ahead of last year's record pace in both volume (2.22 million tonnes) and value (US$5.69 billion). The increases were even stronger for pork muscle cuts, jumping 22% to 1.87 million tonnes valued at US$4.93 billion (up 19%).
Pork export value averaged US$51.07 per head slaughtered in September, up 2% from a year ago, while the January-September average increased 14% to US$58.63. Exports accounted for 26.5% of total pork production in September and 23.9% for muscle cuts only, up from 25.1% and 21.7%, respectively. Through September, exports accounted for 29.6% of total production and 26.9% for muscle cuts, up from the 2019 ratios of 26.3% and 22.8%.
September beef exports were down 6% from a year ago to 103,277 tonnes, valued at US$600.9 million (down 9%). Through September, exports trailed last year's pace by 8% in volume (911,936 tonnes) and 9% in value (US$5.55 billion).
Beef export value averaged US$274.31 per head of fed slaughter in September, down 14% from a year ago, while the January-September average fell 5% to US$295.21. Exports accounted for 12.8% of September beef production and 10.5% for muscle cuts only, down from 14.6% and 11.9%, respectively, in September 2019. January-September exports accounted for 13.2% of total production and 11% for muscle cuts, down from 14.3% and 11.6%, respectively.
China still leading pork shipments, but other key markets strengthening
Pork exports to the China/Hong Kong region remained strong in September, outpacing last year by 23% in volume (62,791 tonnes) and 14% in value (US$132 million) and pushing exports through the third quarter to 800,747 tonnes (up 96% from a year ago) valued at US$1.83 billion (up 120%). However, September exports to China/Hong Kong accounted for 28% of total US export volume and 23% of total value, compared to 37% and 33%, respectively, from January through August. US pork continues to face a 25% tariff disadvantage in China, due to retaliatory duties related to US section 232 tariffs on steel and aluminum.
"Exporting countries are watching the hog production recovery in China very closely, because we know its demand for imported pork is moderating," said USMEF president and CEO Dan Halstrom. "While USMEF is pleased to see US pork exports to China/Hong Kong maintaining a strong pace, it is vitally important that our export destinations remain diversified. The US industry continues to pursue this goal aggressively, both in the Asia Pacific region and the Western Hemisphere."
Reflecting a continued tight labor situation, September exports of bone-in ham and shoulder cuts were up 46% from a year ago at 56,792 tonnes, led by Mexico (39,600 tonnes, +13%) and China (11,100 tonnes, up from minimal volumes a year ago), plus growth to Canada, Colombia, Philippines and Vietnam. Conversely, smaller pork variety meat exports are also due in part to limited US labor availability.
September exports to Japan, traditionally the leading value market for US pork, increased 11% from a year ago in both volume (30,746 tonnes) and value (US$126.7 million). Despite slumping in May and June due mainly to interruptions in production, exports through September were up 2% from a year ago to 284,108 tonnes, valued at US$1.19 billion (up 4%). Japan's imports of US ground seasoned pork reached US$243 million through September, up 46% from last year, capitalising on tariff reductions included in the US-Japan Trade Agreement.
For the second consecutive month, Mexico was the leading volume destination for US pork muscle cuts, with September exports reaching 47,898 tonnes (up 2% from a year ago). But when adding variety meat, September exports were down 2% at 55,340 tonnes, valued at US$88.8 million (down 9%). January-September exports declined 7% in volume (490,893 tonnes) and 14% in value (US$790.6 million). Despite the lower volumes, US share of Mexico's pork imports has rebounded strongly in 2020 to 89%, up from 83% in the same period last year.
Other January-September highlights for US pork include:
- With pork production in the Philippines and Vietnam impacted by African swine fever, exports to the ASEAN region continue to gain momentum, climbing 39% above last year in volume (58,077 tonnes) and 45% higher in value (US$137.5 million). Exports to Vietnam more than tripled last year's volume (20,723 tonnes, up 203%) and quadrupled in value (US$44.7 million, up 302%). The Philippines remains the region's largest destination for US pork, with exports up 8% from a year ago in volume (33,032 tonnes) and 13% higher in value (US$79.7 million).
- Canada's demand for US pork is also trending higher, with export setting a record in September at 23,153 tonnes (up 20% from a year ago) valued at US$88.2 million (up 19%). Through September, exports were 6% above last year at 169,751 tonnes, valued at US$626.7 million (up 5%).
- Exports to Taiwan were sharply higher in September at 2,772 tonnes (up 359% from a year ago), valued at US$7 million (up 233%). This pushed the January-September totals to 15,937 tonnes (up 13%) valued at US$41.1 million (up 21%). However, US pork may face headwinds in the market due to pushback following the Taiwanese government's announcement that it will ease restrictions on US pork produced with ractopamine, coupled with a plan to implement extensive country of origin labeling requirements. Taiwan's amended regulations are set to take effect January 1.
- Pork exports to Chile rebounded strongly in September, doubling the year-ago volume at 4,059 tonnes, valued at US$9.6 million (up 57%). January-September exports pulled closer to last year's pace but remained 4% lower in volume (32,474 tonnes) and 9% lower in value ($88.8 million).
- January-September exports to the Caribbean were up 5% year-over-year in volume to 42,009 tonnes, with value steady at US$98.4 million. Strong retail demand in Trinidad and Tobago (which is less dependent on tourism than other islands in the region) and the popularity of processed pork using US raw material in the Dominican Republic continue to support export volumes. Exports to the Bahamas also rebounded in September as resorts planned to reopen for the high tourist season.
Beef demand still volatile, but exports poised for strong finish to 2020
COVID-19 related obstacles continue to negatively impact demand for US beef in several key markets, especially Mexico, Central America and the Caribbean. Some Asian markets also recently reimposed social distancing measures, but retail and takeout demand in these markets tends to offset more of the losses in sit-down dining.
"Although restaurant traffic and foodservice activity are not back to normal in most Asian markets, USMEF is very encouraged by the recovery in Asia and this was especially evident in the strong August and September exports of US beef to South Korea, Taiwan and China," Halstrom said. "As we close out the year, US beef has a great opportunity to capture greater market share in Asia due to tightening supplies from Australia. While it will require more time, we also expect US beef to regain momentum in regions where beef demand depends more heavily on travel and tourism, and where e-commerce channels are not as well-developed."
Following a record performance in August, beef exports to Korea remained strong in September at 21,450 tonnes, up slightly from a year ago, though value slipped 7% to US$140.7 million. Through September, exports to South Korea trailed last year's record pace by 3% in volume (189,712 tonnes) and 6% in value (US$1.32 billion). South Korea's imports of chilled US beef were on a record pace through September, increasing 15% from a year ago to 47,370 tonnes, with market share climbing to 64%.
Also coming off a record-large month, September exports to Taiwan were up 13% from a year ago to 5,756 tonnes, valued at US$49.4 million (up 14%). These results pushed January-September exports 1% ahead of last year's record pace at 48,285 tonnes, valued at US$413.6 million (down 3%).
September beef exports to leading market Japan were up slightly from a year ago at 24,160 tonnes, though value fell 4% to US$142.5 million. Through September, exports to Japan were 3% below last year in both volume (233,730 tonnes) and value (US$1.47 billion). However, US share of Japan's imports has increased from 40.6% to 43.7% as Japan is importing less from Australia and Canada while imports of certain US products, including short plate and tongues, exceed last year.
Other January-September highlights for US beef include:
- Beef exports to China set another record in September at 4,730 tonnes valued at US$32.3 million, more than tripling last year's totals. January-September exports to China were 17,878 tonnes (up 160% from a year ago) valued at US$129.6 million (up 136%). This growth helped push exports to the China/Hong Kong region 11% above last year at 76,493 tonnes, with value up 5% at US$604.8 million. Australia's grain-fed exports to China totaled 51,745 tonnes through September, down 1% from last year, while grass-fed volume fell by 30% to 104,100 tonnes on limited Australian production and strong competition from South America. USMEF projects strong demand for grain-fed US beef in China even as prices have softened for grass-fed beef.
- Demand for US beef continues to strengthen in Canada, where exports were 12% ahead of last year in volume (83,017 tonnes) and 14% higher in value (US$564.9 million). Canada has been a bright spot for US beef variety meat, with exports climbing 21% to 6,803 tonnes valued at US$14.8 million (up 40%).
- Sub-Saharan Africa has also emerged as a strong destination for US beef variety meat, with exports increasing 62% from a year ago in volume (21,476 tonnes) and 58% in value (US$16.1 million), led by growth in South Africa, Cote d'Ivoire, Gabon and Angola.
- Strong demand for US beef livers helped push September exports to Peru to 1,182 tonnes, the highest since 2014. January-September exports to Peru were up 23% from a year ago at 7,417 tonnes. Value was down 20% to US$15.5 million, reflecting a larger percentage of variety meat in the export mix.