USDA’s Foreign Agricultural Service released meat export data for July today and it showed a continuation of both remarkable pork exports and a recovery of beef exports. It is important to note that these data are for July, not August — when we believe exports really became interesting. We noted last week the growth of beef exports to Korea and exports are about the only explanation for August’s pork and hog price run-up. But those data will not be released until mid-October.

Meanwhile, July was another HUGE month for pork exports — up 86.7% from July 2007. What is unbelievable is that the July year-on-year increase is the smallest since March, following 93.7% in April, 96.% May and 111.7% in June. That final number is larger than was widely quoted because it is based on product weight data from FAS, not carcass weight data from ERS. China-Hong Kong led the growth parade once again at +185.3% from last year. China-Hong Kong was also the largest customer for U.S. pork in July — the fourth time this year that Japan has been number two after never having been before. Year-todate pork exports now stand at +70% (please refer to the graph below). Japan is still the largest customer for 2008 but look at the total YTD growth for China-Hong Kong: +425%. Shipments to Mexico in July were just over double those of July 2007 to push YTD shipments up to +39%. Shipments to Russia are up 144% for the year putting Russia in a dead heat with Canada for our fourth largest export customer.

Similar growth of pork variety meat exports has helped hog values by pushing total by-product values to nearly $25/head. As can be seen in the chart below, China-Hong Kong is the leader of that growth as well and has drawn virtually even with Mexico, which was once by far the largest customer for U.S. pork variety meats. Sales to Russia and Korea have grown significantly this year as well.

Figures 1 and 2 show YTD results for the value of pork and pork variety meat exports. They reflect this year’s major volume growth but also indicate that the growth has not been accomplished through price reductions. The value of exports has grown almost as much as has the quantity meaning that prices have fallen only slightly. The value of pork variety meat exports has actually grown more than the quantity indicating higher prices. Both results speak clearly of very strong export demand.

U.S. beef exports grew to 61,869 metric tons in July, 15.9% higher than last year. That growth rate is about half the rate of the January through June rates mainly because this years’ data are being compared to a very good month in July 2007. Japan led the growth in both unit and percentage (+82.6%) terms in July. Shipments to Canada, Mexico, Taiwan and Vietnam grew from last year as well with the last of those being 5 times as large as last year — but still small, accounting for only about 4.5% of total exports. July exports to Korea were 86% lower than in last July but here is another case where one needs to be careful about percentages. July of 2007 was the peak for shipments to Korea after the initial agreements regarding BSE protection mechanisms. In fact, nearly half of our 2007 exports to Korea occurred in July.