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January Meat Exports Show Mixed Results

by 5m Editor
15 March 2010, at 10:19am

US - The pace of US beef and pork exports cooled somewhat in January, according to statistics released by USDA and compiled by the US Meat Export Federation (USMEF). Muscle cut exports held up fairly well in January, but total exports were held down by a very sluggish market for variety meat.

Pork plus pork variety meat exports were eight per cent lower in both volume and value than in January 2009, but variety meat also weighed heavily on these results. Muscle cuts fell only four per cent in volume and five per cent in value, while variety meat exports declined 18 per cent in both categories.

Pork exports strong in most markets, but dropped sharply in Japan

January pork plus pork variety meat exports totaled 144,180 metric tons (317.9 million pounds) valued at just over $333 million. Exports were eight per cent lower in both volume and value than in January 2009, but were impacted heavily by a nearly 20 per cent decline in variety meat exports. For muscle cuts only, exports were down 4 percent in volume and five per cent in value. Exports accounted for 22 per cent of total pork/pork variety meat production (consistent with 2009), while export value per head slaughtered amounted to $37.37 - up about $.80 per head over a year ago.

Not surprisingly, exports to China and Russia were well below last year’s levels, as China remains closed from the H1N1-related ban imposed in mid-2009 and exports to Russia were heavily impacted by a lack of eligible US plants. Efforts continue to restore access to both these markets, with notable progress being made with Russia. Agreement has been reached on a new export certificate, several US plants have regained eligibility to export to Russia, and more are expected to receive approval in the near future.

The most significant jolt to January’s results was the nearly one-third decline in exports to Japan, which is by far the largest value market for US pork. Exports to Japan totaled 27,936 metric tons (61.6 million pounds) valued at $108 million. While these are still strong results, exports were down 34 percent in volume and 27 percent in value from the torrid pace of January 2009.

“The United States is still the market leader in Japan, and this market is still performing at a very high level,” Mr Seng said. “But Japan had a notable increase in its domestic pork production in 2009, which created a backlog in its pork inventories and lowered domestic prices significantly. We are definitely feeling some impact from that, though we don’t expect that production trend to continue this year.

“US pork is extremely well-positioned in Japan, with our chilled products gaining wide acceptance in both the retail and foodservice sectors,” he continued. “US back ribs are also gaining traction in Japan, and our processed items and sausages are also performing very well. Despite taking a step back in January, our prospects remain bright in Japan.”

Mexico solidified its position as the largest volume market for US pork/pork variety meat, setting a new monthly record of 54,458 metric tons (120.1 million pounds) valued at $93.5 million. This was an increase of 12 per cent in volume and 27 per cent in value over January 2009, and surpassed the previous record (from December 2009) by five per cent in volume and four per cent in value.

“The gains US pork has achieved in Mexico are quite remarkable,” Mr Seng said. “USMEF worked very hard to rebuild pork demand and consumer confidence during last year’s H1N1 crisis, and those efforts have really taken hold. Demand has not only recovered, but has actually risen to new heights.”

Other markets performing extremely well compared to January 2009 included:

Hong Kong – 17,615 metric tons (38.8 million pounds) valued at $23 million, an increase of 36 per cent in volume and 19 per cent in value.

Canada – 13,135 metric tons (29 million pounds) valued at $41.9 million, an increase of two per cent in volume and 11 per cent in value.

Central/South America – 4,542 metric tons (10 million pounds) valued at $10.5 million, an increase of 39 per cent in volume and 47 per cent in value.

Philippines – 4,454 metric tons (9.8 million pounds) valued at $8.4 million, an increase of 32 per cent in volume and 50 per cent in value.

Taiwan – 4,252 metric tons (9.4 million pounds) valued at $7.5 million, an increase of 54 per cent in volume and 87 per cent in value.

Dominican Republic – 1,682 metric tons (3.7 million pounds) valued at $3.1 million, an increase of 76 per cent in volume and 59 per cent in value.

Besides Japan, Russia and China, markets showing a decline from year-ago levels included South Korea, Australia and New Zealand. Like Japan, Korea’s domestic pork inventories have swelled, creating a much less favourable price environment for imported product.

While Mr Seng is pleased to be making progress with Russia and anxious to restore access soon to mainland China, he explained that these markets are not likely to immediately rebound to the record levels of 2008. That’s why it is critically important to develop other key markets in Asia and to build on the positive momentum pork exports have achieved in Mexico and other Latin American nations.

“There is no question that Russia and China are still key targets for US pork, and getting back into these markets is critically important,” he said. “But it’s also important to understand that these countries are determined to bolster their own production and to reduce their reliance on imported products. We must be prepared for continued challenges in these markets, and work diligently to grow our pork exports across the entire globe.”

Complete January 2010 export statistics are online http://www.usmef.org:8000/AboutUs/files/January%202010.pdf.