Beef Today editors
Red meat exports continued their strong pace through November, with pork up 20% and beef up 9% (including variety meat) compared to November 2007.
For the first 11 months of 2008, pork and pork variety meat exports were 61% larger than 2007, nearing the 2 million metric ton mark (1,898,698 metric tons or 4.18 billion pounds). 2008 pork exports through 11 months were valued at $4.5 billion, an increase of 59%.
The story for U.S. beef exports also remains positive. January through November beef exports were up 37% to 582,270 metric tons (1.28 billion pounds) with variety meat exports up 18% to 331,479 metric tons (730.8 million pounds). Total beef exports of 913,739 metric tons (2.01 billion pounds) were up 29% and valued at $3.37 billion, an increase of 40%. 2008 beef exports are on pace to reach 94% of the 2003 export value.
"Global protein supplies remain tight, with the exception of a few situations in key countries where stocks of imported red meat are weighing on the market, specifically in Korea and China,” said Erin Daley, U.S. Meat Export Federation (USMEF) economist. "As currencies and prices stabilize, inventories will decline and demand for U.S. red meat will likely continue at a relatively strong level. Although pork exports are not expected to maintain the stunning pace of 2008, they are forecast to exceed 2007 volumes.”
"The bottom line is that, regardless of the global economic situation, people have to eat,” said Daley. "U.S. beef and pork prices are lower than they were during the summer, which helps offset the increased strength of the U.S. of the dollar.”
Despite the slowing of global trade in all products, pork exports from the major suppliers, the European Union (EU), the U.S. and Canada, remained fairly steady from September through November. Pork exports from Brazil, however, declined by 50% in November, and its beef exports fell 35% compared to November 2007. Reduced exports to Russia and Hong Kong account for most of the decline. Australia's beef exports remained strong from September through November, largely due to an increase in exports to the United States, with U.S. import demand stimulated by the strengthening U.S. dollar.
Nearly 11% of U.S. beef and beef variety meat production was exported in January through November 2008. Export value equated to $134.83 per head of steer and heifer slaughter. For comparison, in 2003 approximately 13% of production was exported, with exports equating to $136.46 per head.
"The top market for U.S. beef, Mexico, has been hit by the weak peso and the recession,” said Daley. "U.S. round prices remained above year-ago levels during November and this, combined with the weak peso, resulted in slower beef exports to Mexico.”
Beef exports to Mexico were down 16% in November to 12,872 metric tons (28.4 million pounds) but January through November exports were still up 11%, totaling 194,275 metric tons (428.3 million pounds). Variety meat exports were up 10% through November, totaling 170,240 metric tons (375.3 million pounds), with combined beef and variety meat exports up 10% as well, totaling 364,515 metric tons (803.6 million pounds) and up 18% to $1.29 billion. Mexico accounted for 40% of U.S. beef and variety meat export volume from January through November 2008. U.S. imports of Mexican feeder cattle declined by 34.6 percent in 2008, totaling just 702,873 head.
Exports to Canada accounted for 16% of total U.S. export volume and 20% of U.S. export value through November. Exports to Canada were down 15% in November to 10,950 metric tons (24.1 million pounds), but January through November exports were up 21% to 143,955 metric tons (317.4 million pounds) valued at $669.8 million (including variety meats). Similar to hogs, U.S. imports of Canadian slaughter cattle were down 24% in 2008.
Exports to Japan were up 41% to 5,264 metric tons (11.6 million pounds) in November, but this was the lowest monthly volume since April, likely due to fewer available cattle under 21 months of age, Daley noted. January through November exports were up 61% to 69,943 metric tons (154.2 million pounds) valued at $359.4 million. USMEF's continued promotion of alternative cuts is helping to maximize the amount of beef exported to Japan despite the limited market access situation.
Exports to the Middle East were up 25% in November at 9,541 metric tons (21 million pounds) with January through November exports down 3% in volume but up 36% in value, totaling 85,663 metric tons (188.9 million pounds) valued at $138.4 million. Liver exports to Egypt still account for the bulk of export volume, but beef muscle cut exports to the region were up 68% to 10,700 metric tons (23.6 million pounds) through November, primarily destined for the United Arab Emirates (UAE), Saudi Arabia and Kuwait. Retail sales of U.S. beef in the UAE and Saudi Arabia supported the growth in exports in 2008.
South Korea imported 6,986 metric tons (15.4 million pounds) in November, with exports through November totaling 53,932 metric tons (118.9 million pounds), more than double exports during the sporadic market opening in 2007. Large supplies of beef remain in cold storage in Korea, despite the resumption of beef sales by the major retailers in late November. Although retail sales help build confidence in U.S. beef, foodservice will be the major outlet for the frozen beef stocks. Many factors are limiting U.S. beef sales at the restaurant level including the new country of origin labeling requirement, the economic slowdown and lingering concerns about consumer acceptance.
The ASEAN region has maintained an impressive pace of beef imports through the economic downturn, with November U.S. exports up 92 percent to 4,700 metric tons (10.4 million pounds) and up 233% through November to 49,783 metric tons (109.8 million pounds) valued at $153 million. Vietnam accounted for 37,648 metric tons (82.9 million pounds) with the remainder primarily destined for Philippines (7,984 metric tons or 17.6 million pounds) and Indonesia (2,962 metric tons or 6.5 million pounds).
Exports to Russia were 1,624 metric tons (3.6 million pounds), primarily variety meats, during November, with exports totaling 45,294 metric tons (99.9 million pounds) through November. Beef muscle meat exports accounted for 15,636 metric tons (34.5 million pounds) of the total, but muscle cut exports have been minimal since the record large shipments during the summer and early fall, prior to the credit crisis and weakening of the ruble.
U.S. beef exports to Taiwan hit 1,940 metric tons (4.3 million pounds) in November, down 31% compared to a year ago, but were larger than exports in September and October 2008. Through November, exports were up 20% totaling 24,961 metric tons (55 million pounds) valued at $117 million.
Other Beef Markets
- European Union – down 3% compared to 2007, totaling 1,552 metric tons (3.4 million pounds) for November. Through the first 11 months of 2008, exports were up 54% compared to 2007 totaling 18,850 metric tons (41.5 million pounds) valued at $92.9 million.
- The Caribbean – exports to this region were up 3% for the first 11 months to 17,710 metric tons (39 million pounds), valued at $70 million, up 14% (including the Dominican Republic). For November, exports were up 9% in volume and 7% in value over November 2007.
- Central and South America – exports were up 21% to 9,819 metric tons (21.6 million pounds) through November — 45% of the exports were destined for Peru (livers and hearts). Exports were valued at $23.5 million, a 48% increase. November exports declined slightly in volume from 2007, but increased 16% in value.
- Hong Kong – exports were up 3% to 8,743 metric tons (19.3 million pounds) through November, but the value of those exports was up 19% in value to $37.5 million. November exports increased by 13% in volume and 10% in value over November 2007.