A few things to keep in mind today and in the days to come:

• Japan is the largest customer in terms of value for US pork and beef. Japan was the largest customer for pork cuts in terms of volume and 3rd largest customer for beef cuts in terms of volume in 2010.
  
  
• According to our sources, much of the US beef and pork that goes to Japan is delivered to ports from Tokyo southward. Several news reports have pointed out that, even though they were almost all closed on Friday (Saturday in Japan), most of those ports were not heavily damaged and were expected to be open again this week.
  
  
• Refrigeration is indeed an issue but reports indicate that the power grid is operational in many areas and power will be diverted and re-routed to areas in need — just as it would be here in the US The hardest hit areas obviously do not have a working power delivery system, so there will be problems in serving those areas and some product will no doubt be lost.
  
  
• We have to remember that whatever is lost—in terms of food products as well as buildings, roads, cars, planes, etc. — will be replaced and the process of replacement will BOOST the Japanese economy in the months to come. Economies work when money moves and the loss figures we see do not mean that XX billion yen will be thrown down a rat-hole. They mean that XX billion yen will be spent to repair the damage and will thus be paid out for labor, materials, energy and the like, boosting GDP. Again — we don’t mean to be crass or uncaring about the suffering and loss, but those are the facts. The short-term impact may indeed be negative but stocks of food and other items will eventually be replenished and that process will be a positive for US exports.

CME Group Live Cattle and Lean Hogs were lower on Friday with hogs taking the largest hit closing down $0.88 (October) to $1.95 (June) for the day. Lower grain prices (old crop corn was down 12 to 18 cents, new crop was down 8-10 cents, soybeans were down 19-22 cents) allowed CME Group Feeder Cattle futures, with the sole exception of the nearby March contract, to post gains of 33 to 58 cents per hundred pounds (cwt.). Weekend electronic markets have seen further declines in grains with the largest drops being for corn. New crop Dec corn futures were trading at $5.66/bu. as of midnight Sunday.

On the same day that a natural catastrophe raised such serious questions about US exports in the immediate future, the Department of Commerce and USDA’s Foreign Agricultural Service released very positive export results for January. US beef and veal exports totaled 63,207 metric tons (MT) valued at $307.95 million. Those figures are 24 and 44 per cent higher than one year ago, respectively. Beef variety meats exports in January were up 22.7 per cent from last year at 26,467 MT. The value of beef variety meat shipments grew by 39 per cent relative to last year to $47.601 million. Cattle hide exports were 19 per cent higher than one year ago and the value of cattle hide export was 47.1 per cent higher. Beef shipments to every Russia, Japan and Korea were higher in January than they were in December but exports to all other markets declined for the month. Note that the chart at right is in carcass weight equivalents where the data cited above is in product weight.

US pork exports started 2011 solidly as well with pork cut exports coming in at 125,470 MT, 16.5 per cent higher than last year. The value of those exports grew by 22.5 per cent form last year indicating continued strength in unit pricing. January pork variety meat exports were up 11.2 per cent form last year in volume but gained only 2.3 per cent in value. Japan remained the top destination for US pork cuts while Mexico remained our number one market for variety meats and for total pork products. Markets showing year-on-year growth were Japan, China/HK (+83.2 per cent primarily due to last year’s VERY low numbers), Russia and Korea. That last, of course, is a key longterm issue due to their foot and mouth disease (FMD) outbreak. Korea was our 4th largest market (trailing Japan, Mexico and China/ HK) in January and January shipments to Koreas were 35.036 million pounds carcass weight — the fourth highest monthly total on record and up 144 per cent form last year’s level. Shipments to Russia were up 7,415 per cent from last January’s measly 81,000 lbs. carcass.