Source: U.S. Meat Export Federation
U.S. pork exports finished the first quarter 8 percent higher in volume (598,058 metric tons) and 20 percent higher in value ($1.66 billion) than last year’s record pace, according to statistics released by the USDA and compiled by the U.S. Meat Export Federation (USMEF).
At the same time, the value of beef exports for the quarter rose 4 percent (to $1.25 billion) on 10 percent lower volumes (266,388 metric tons).
March pork export volume of 198,972 metric tons was 8 percent lower than a year ago, but up 6 percent from February 2012. Export value of $570.5 million was 3 percent higher than last year and up 8 percent from the previous month. These results were led by excellent growth in the China/Hong Kong region and by strong performance in Mexico, Japan and Canada.
Beef export volume in March of 89,803 metric tons was 23 percent lower than last year but up 3 percent from February. March export value of $438.5 million was down 8 percent year-over-year but was 7 percent higher than the previous month.
"A 20 percent increase in pork export value for the first quarter is extraordinary, especially considering the record performance of last year," said USMEF President and CEO Philip Seng. "On the beef side, market access issues and price sensitivity are making volume growth difficult in some markets, but we are pleased to see export value remaining above last year’s record pace, even on smaller volumes."
Pork export value per head sets new monthly record
March pork export value was particularly strong on a per-head-slaughtered basis, reaching $59.92. This was nearly $4 higher than a year ago and set a new monthly record, surpassing the previous high of $59.53 set in November 2011. Exports equated to 27.8 percent of total U.S. production of muscle cuts plus variety meat, and 24 percent when including muscle cuts only.
Mexico remains the leading market for U.S. pork on a volume basis, with first quarter exports up 17 percent in both volume (162,721 metric tons) and value ($299.7 million). Exports to Japan, which nearly reached the $2 billion mark in 2011, were up just 1 percent in volume (122,899 metric tons) but also achieved a 17 percent increase in value to $530.6 million. Exports to the China Hong/Kong region, which came on very strong in the second half of 2011, were 30 percent higher in volume in the first quarter (115,642 metric tons) and surged 82 percent in value to $234.9 million.
Other first quarter market highlights included:
- Exports to Canada were up 26 percent in volume (55,916 metric tons) and were one-third higher in value at just under $200 million.
- In Russia, where U.S. pork now has better potential for expansion under a global tariff rate quota, exports were up 20 percent in volume (15,510 metric tons) and 36 percent in value ($47.9 million).
- Led by a strong performance in Colombia, exports to the Central and South America region expanded 9 percent in volume (20,603 metric tons) and 16 percent in value ($53.5 million).
In South Korea, pork exports surged in the early months of 2011 because of culling of the domestic swine herd (due to foot-and-mouth disease) and a temporary duty-free tariff rate quota for some cuts of imported pork. Consequently, year-over-year exports to Korea were lower in the first quarter of 2012 – down 27 percent in volume (53,590 metric tons) and 12 percent in value ($154 million). It is important to note, however, that these totals were still more than double the volume and triple the value recorded in the first quarter of 2010.
"While domestic supplies are recovering in Korea, we are still creating new opportunities for U.S. pork." Seng said. "The lower tariffs made possible by the Korea-U.S. FTA will enhance the competitiveness of U.S. pork in terms of price, and help us further expand the presence of chilled pork and value-added pork products in the retail and foodservice sectors. These marketing strategies have proven very effective in Japan, and I believe we can have similar success across north Asia."
While beef export volume slows in some markets, value remains solid
March beef export value equated to $204.65 per fed steer and heifer slaughtered, down slightly from the March 2011 total of $205.40. Beef exports accounted for 12 percent of total U.S. production when including both muscle cuts and variety meat, and 9 percent for muscle cuts only. These ratios were lower than a year ago (15 percent and 11 percent, respectively).
Despite a 13 percent decline in volume, Mexico remained the leading destination for U.S. beef (55,725 metric tons) and exports to Mexico managed a 5 percent increase in value to $250.9 million. Export volume to Canada was steady with last year at 36,834 metric tons, but 15 percent higher in value at $215.4 million.
In Japan, where the Food Safety Commission continues to examine BSE-related age and product restrictions on U.S. beef, exports were down 7 percent in volume (29,695 metric tons) but up 10 percent in value ($194 million). The United States continues to gain market share, as Australia’s exports to Japan have fallen 14 percent in 2012.
Other first quarter market highlights included:
- Exports to Russia reflected a shift toward higher-value muscle cuts, as volume increased 4 percent to 14,463 metric tons but volume surged 85 percent to $59.9 million. As with pork, U.S. beef faces a more favorable access situation in Russia as the U.S. tariff rate quota for muscle cuts was expanded from 41,700 metric tons in 2011 to 60,000 metric tons this year.
- While exports to some Middle East markets slowed, Egypt continued to post very strong results – increasing 12 percent in volume (31,466 metric tons) and 18 percent in value ($47.7 million). As a result, exports to the Middle East region were up slightly in volume (35,480 metric tons) and 10 percent in value ($78.9 million).
- Led by outstanding results in Chile, exports to the Central and South America region increased 44 percent in volume (8,383 metric tons) and 94 percent in value ($32.5 million). Exports to Peru and Guatemala also posted impressive value growth.
Market access issues took a toll on U.S. beef exports to Taiwan (down 18 percent in volume to 5,554 metric tons and 11 percent in value to $35.1 million), where controversy over ractopamine residue testing has made for a very unsteady business climate. Drastically lower import quotas have lowered U.S. beef exports to Indonesia, where volume (601 metric tons) was down 86 percent and value ($2.4 million) was down more than 60 percent. (Though not reflected in these results, Indonesia also imposed new market access restrictions as a result of the BSE case announced April 24.) Year-over-year exports were also lower for Korea, but this was largely due to a surge in export activity in early 2011. First-quarter performance in Korea was fairly consistent with the second half of 2011. U.S. beef has also continued to gain market share in Korea this year, as Australia’s exports have declined by 37 percent.
"Despite a decline in export volume, prospects for U.S. beef remain positive across the globe," Seng said. "We are, for the most part, encouraged by the response to the recent BSE case. Nearly every trading partner followed established science and did not alter our level of market access. We remain hopeful that Japan will open to a wider range of products later this year and that access issues in other Asian markets will also be addressed. Consumer demand for U.S. beef is solid, but we need to eliminate trade barriers and maintain an active presence in these markets in the face of aggressive competition if we want to keep export value strong and get back to the record volume pace established in 2011."
Lamb export value up slightly despite slump in volume
Lower exports to the Caribbean and a sluggish market for variety meat held back the first quarter performance of U.S. lamb. Export volume was down 18 percent to 3,295 metric tons, while value increased slightly to $6.4 million. Led by strong exports to Canada, lamb muscle cuts achieved a 12 percent increase in value ($4.4 million) despite a 9 percent decline in volume (1,484 metric tons).