2010 Beef, Pork Exports Gaining Momentum

May 12, 2010 07:00 PM

Source: U.S. Meat Export Federation

U.S. beef and pork muscle cut exports performed well in March, concluding the first quarter of 2010 with increasing momentum. A sluggish global market for variety meat held down the overall totals, but muscle cut export value for both products are running ahead of their 2009 pace.

Beef muscle cuts are off to a particularly strong start in 2010, increasing 22% in volume to 156,947 metric tons (346 million pounds) for the quarter. The increase in value was even higher, up 24% to $678 million. The combined beef/beef variety meat totals are also impressive, rising 11% in volume (to 225,122 metric tons or 496.3 million pounds) and 14% in value (to $788.5 million). Total beef exports accounted for 10.6% of overall production in March compared to 9.4% in March 2009. Export value per steer and heifer slaughtered equated to $127.40, compared to $110.67 last year.

Pork muscle cut exports pulled ahead of their 2009 pace by 1% in volume (356,297 metric tons or 785.5 million pounds) and 2% in value ($941.9 million). Combined pork/pork variety meat totals are slightly behind last year in both volume (468,793 metric tons or 1 billion pounds) and value ($1.11 billion).

On a positive note, the value of total pork exports in March edged up 1% compared to March 2009, and it was 18% ahead of the value of pork exports in March 2008, a record-setting year for U.S. pork exports.

Pork exports accounted for 22.5% of total production compared to 25% in March 2009, but muscle cut exports accounted for 19% of production, the same as one year ago. Per-head pork export value equated to $39.80 – which is down about $1 from March 2009.

The results for both beef and pork exports were achieved despite significant declines in each of their leading value markets. Beef exports to Mexico continue to struggle due to weakness in Mexico's economy. Though beef muscle cut exports managed to pull within 7% in volume and 10% in value of their 2009 pace, variety meat exports to Mexico are still down dramatically.

Pork exports to Japan – which exceeded $1.5 billion in each of the last two calendar years – have slowed due to unusually high inventories of domestic pork. Muscle cut exports to Japan are within 13% in volume and 11% in value of last year's pace. But while variety meat makes up only a small portion of the U.S. pork shipped to Japan, those exports are down 62% in volume and 46% in value.

Beef exports booming overseas, but still struggling in Mexico

With the exception of Mexico, U.S. beef exports are surging in nearly all key global markets. Asian markets are performing well across the board, with excellent gains also posted in Canada, the Middle East, the Caribbean and Europe, and explosive growth achieved in Russia.

Canada solidified its position as the No. 2 volume and value market for U.S. beef, with first quarter beef/beef variety meat totals reaching 32,045 metric tons 70.6 million pounds) valued at $139.4 million. This is an increase of 14% in volume and 19% in value over 2009.

Japan is the No. 3 value market at $95.3 million – up by 33% over the first quarter of last year. In terms of volume, Japan is up 37% to 18,487 metric tons (40.8 million pounds). While the United States and Japan recently undertook a new round of discussions on market access for U.S. beef, these gains were achieved despite Japan's restriction of U.S. imports to beef from cattle 20 months of age or younger.

South Korea surpassed Japan slightly in terms of first-quarter volume (18,763 metric tons or 41.4 million pounds) and is the No. 4 value market at $78.2 million. This is an impressive increase of 11% in volume and 24% in value over 2009, but recent Korean import data tell an even more positive story. These data show imports of U.S. beef/beef variety meat increasing 66% in the first quarter, with the United States accounting for more than 30% of Korea's beef imports. Korea's April data show an 80% increase in imports of U.S. beef. Weekly U.S. export data compiled in April suggest that Korea is currently the second-largest market for U.S. beef muscle cuts, trailing only Mexico.

Other first-quarter beef highlights include:

The recent addition of bone-in beef cuts has helped bolster exports to Taiwan, which gained 85% in volume (8,488 metric tons or 18.7 million pounds) and nearly doubled in value to $45 million. While the expansion of eligible products generated some negative local publicity, USMEF worked very closely with importers and end-users of U.S. beef to reassure them about product safety and quality. As a result of these ground-level efforts, consumer response has been positive and beef exports continue to gain significant momentum in Taiwan.

Despite exports to Vietnam being about equal to 2009, the ASEAN region continued to show a strong increase in demand for U.S. beef. Led by outstanding growth in the Philippines and Indonesia, beef/beef variety meat exports to the region are up 12% in volume (21,936 metric tons or 48.4 million pounds) and 11% in value (to $71.2 million).

Beef/beef variety meat exports to Hong Kong more than tripled in both volume (7,613 metric tons or 16.8 million pounds) and value ($28.8 million).

The Middle East continued its growth as a major destination for U.S. beef, gaining 37 percent in volume (to 25,963 metric tons or 57.2 million pounds) and 51% in value (to $43.9 million). The increase in muscle cut volume (158%) and value (72%) were even more impressive. While the region has long been a mainstay market for U.S. beef variety meat, muscle cuts continue to make up a higher percentage of exports to the Middle East.

Russia, which almost exclusively purchased beef livers in 2009, is now importing U.S. beef muscle cuts at a pace not seen since mid-2008. This resurgence is reflected in Russia's combined beef/beef variety meat totals, which more than doubled over last year (to 12,855 metric tons or 28.3 million pounds) and increased by more than 400% in value to $28.9 million.

Impressive gains were also posted in the Dominican Republic, which was up 130% in volume and 108 percent in value. The rest of the Caribbean region increased substantially as well, up 30% in both volume and value. The European Union (up 37% in volume and 80% in value) and Central and South America (up 39% in volume and 44% in value) also gained significant ground over 2009.

These results left Mexico as the only major beef market trailing last year's pace, but even this decline is largely attributable to variety meat. Variety meat exports to Mexico are down 44% in volume and more than 60% in value, while muscle cuts are down 7% and 10% respectively. Despite this decline, Mexico remained the largest destination for U.S. beef/beef variety meat at 58,156 metric tons (128.2 million pounds) valued at $184.7 million.

"As a beef producer, I can't help but be extremely excited about these global results,” said USMEF Chairman Jim Peterson, a rancher from Buffalo, Mont. "We're confident that U.S. beef will rebound in Mexico when economic conditions improve. And when that happens, U.S. beef is well-positioned for a remarkable performance in 2010.”

To read more from USMEF, click here.

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