ShapeShapeauthorShapechevroncrossShapeShapeShapeGrouphamburgerhomeGroupmagnifyShapeShapeShaperssShape

Good Performance for US Pork and Beef Exports

by 5m Editor
15 August 2008, at 1:40pm

US - Pork exports enjoyed a record-setting first half of 2008, while the value of US beef exports has climbed closer to the pre-BSE highs achieved earlier in the decade, according to the latest export figures released by USDA and reported by US Meat Export Federation (USMEF).

Surging meat sales in overseas markets have provided a needed boost for hog and cattle producers in recent months, brightening the outlook for the nation’s livestock industry.

Asia, Russia Drive Pork Exports Skyward; Mexico Also on the Rise

Pork and pork variety meat exports in June totaled 192,667 metric tons valued at $451 million — double the volume exported in June of last year. This drove year-to-date pork exports to 1,018,467 metric tons valued at $2.3 billion — 67 per cent above the first six months of 2007 in terms of volume, and 58 per cent higher than last year in terms of value.

China/Hong Kong is now the largest volume destination for US pork and pork variety meats. Exports to this region in the first half of 2008 jumped 324 per cent over last year to 254,445 metric tons valued at $439.8 million. Exports to this region alone accounted for 6 per cent of this year’s US pork production, as 24 per cent of pork and pork variety meats produced in the United States are now destined for foreign markets.

Strong performance in export markets is providing critical price stability for US pork producers. The pork cut-out set a new record last week at $90.56/cwt — surpassing the $90 mark for the first time. This compares to a cutout price of about $75/cwt last year.

"A significant rise in pork values has been led by strong prices for export items such as trimmings, hams and picnics," said Erin Daley, manager of research and analysis for USMEF.

"The rise in prices for these items indicates continued strong export demand into August." Other strongly performing markets for pork exports (including variety meats) in the first half of 2008 included:

  • Japan: Up 21 per cent in volume over last year to 221,081 metric tons, valued at $712.3 million. Japan remains the single largest market for US pork in terms of value.
  • Mexico: Up 23 per cent in volume over last year to 163,307 metric tons, valued at $270.4 million. These totals still trail the record numbers reached during 2006, but higher domestic pork prices and relatively tight supplies caused by herd liquidation have stimulated a rebound in demand for US pork in Mexico.
  • Russia: Up 137 per cent in volume over last year to 93,531 metric tons, valued at $197.7 million. Muscle cut exports to Russia rose even more sharply - up 143 percent to 75,730 metric tons.
  • Canada: Up 22 per cent in volume over last year to 80,253 metric tons, valued at $258 million. Monthly exports to Canada have steadily exceeded 13,000 metric tons per month through the first half of 2008.
  • Korea: Up 35 per cent in volume over last year to 72,058 metric tons, valued at nearly $150 million.
  • Association of Southeast Asian Nations (ASEAN): Up 431 per cent in volume over last year to 31,532 metric tons, led by the Philippines (16,173), Vietnam (10,168) and Singapore (4,985).

"With pork production running 9 percent over last year, exports have been the clear driver for improved US pork prices," Ms Daley said.

"Exports continue to provide critical support for producers who need to cover sharply higher input costs."

US Beef Returns to South Korea but Other Markets Bolster Performance

Resumption of beef exports to South Korea represents an important and well-publicized breakthrough for US beef producers, as Korea once represented the third-largest market for US beef. But as the first-half results for 2008 strongly indicate, demand for US beef is now surging in a wide range of foreign markets.

Beef and beef variety meat exports in June increased 35 per cent and totaled 89,054 metric tons, valued at $328 million. During the first half of the year, these exports totaled 445,036 metric tons, valued at $1.58 billion – an increase of 30 per cent in volume and 39 per cent in value. First-half exports reached 71 per cent of the volume achieved in the first six months of 2003, and 87 per cent of the value achieved during the same time period.

The top-performing markets for US beef and beef variety meats continue to be Mexico and Canada. Through June, exports to Mexico were up 18 per cent in volume over last year to 199,890 metric tons valued at $678.1 million. Exports to Mexico set a new record in June - surpassing the July 2003 volume and reaching 36,619 metric tons. Meanwhile, January-June exports to Canada rose 41 per cent to 78,790 metric tons, valued at $365.8 million.

US beef continues to rebuild market share in Japan – once the single largest market for beef exports. Beef and beef variety meat sales in Japan climbed 66 per cent in volume over last year to 34,339 metric tons, valued at $177 million. In June, exports totaled 10,146 metric tons - up more than 90 per cent over last year and the largest monthly volume since the market closed in December 2003. USMEF’s efforts to expand Japan’s imports of alternative cuts have paid off, as a much wider range of beef cuts are now marketed in Japan. These alternative cuts help maximize the volume and value of exports from Japan-eligible cattle, which must be less than 21 months of age.

US beef is also showing much greater penetration in the Association of Southeast Asian Nations (ASEAN). Through June, year-to-date exports to this region rose 380 percent in volume over last year to 24,454 metric tons, valued at $67.1 million. Vietnam led the way with 18,092 metric tons, followed by the Philippines at 4,992 metric tons.

Beef exports to Russia are well on their way to surpassing 2003 levels – the last year this market was open to US beef. Russia has imported 11,194 metric tons of beef and beef variety meats so far this year, valued at $25 million. But even more significant is the impact Russia’s demand is having on selected cuts.

"Liver prices increased dramatically as Russia started bidding against Egypt for the limited supply of US beef livers," Ms Daley explained. "Liver prices have risen to more than 70 cents per pound, compared to less than 20 cents per pound last year. This has added roughly $7 per head on a live animal basis."

Ms Daley said that while this year's beef exports will not match the peak levels achieved earlier in this decade, the beef industry is getting close to reaching the same level of value. While beef exports exceeded $3.8 billion in 2003, she forecasts that this year’s exports could total as high as $3.5 billion – assuming no major disruptions in trade.

USMEF's complete June US beef and pork export statistics can be read by clicking here.

5m Editor