US beef exports remain solid; pork exports still facing headwinds

U.S. beef exports remained very strong in September while pork exports continued to be impacted by retaliatory duties in China and Mexico, according to data released by USDA and compiled by the U.S. Meat Export Federation. Beef exports cooled from the record results posted in August, but were still significantly higher year-over-year.

Pork muscle cut exports improved over last September’s volume, but were offset by sharply lower shipments of pork variety meat.

September beef exports totaled 110,160 metric tons, up 6 percent from a year ago, valued at $687.1 million—up 11 percent. For January through September, beef exports were just over 1 million metric tons, up 9 percent from a year ago, while value surged 18 percent to $6.2 billion. For beef muscle cuts only, the year-over-year increases were even more impressive, jumping 13 percent in volume (777,740 metric tons) and 20 percent in value ($5.54 billion).

Exports accounted for 13.7 percent of total beef production in September and 11.4 percent for muscle cuts only, up from 12.5 percent and 10.4 percent, respectively, a year ago. For the first three quarters of 2018, exports accounted for 13.5 percent of total production (up from 12.8 percent) and 11.1 percent for muscle cuts—up one full percentage point from last year. Beef export value equated to $334.63 per head of fed slaughter in September and $320.85 for January through September, each up 16 percent from a year ago.

September pork export volume was down 2 percent from a year ago to 179,423 metric tons, while export value fell 7 percent to $470.2 million. Pork muscle cuts were 2 percent higher than a year ago at 146,542 metric tons, but value still declined 3 percent to $397.6 million. September variety meat exports dropped significantly in both volume (32,881 metric tons, down 18 percent) and value ($72.6 million, down 21 percent). For January through September, combined pork and pork variety meat exports were 1 percent above last year’s record pace at 1.81 million metric tons and 2 percent higher in value at $4.79 billion. For pork muscle cuts only, exports increased 6 percent from a year ago in volume (1.46 million metric tons), valued at just under $4 billion (up 3 percent).

September exports accounted for 24.8 percent of total pork production, up from 23.6 percent a year ago. For muscle cuts only, the percentage exported was 21.8 percent—up two full percentage points from last September. For January through September, pork exports accounted for 26.1 percent of total production, down from 26.5 percent last year, but the percentage of muscle cuts exported increased from 22.1 to 22.7 percent. Export value per head slaughtered was down 1 percent from a year ago in September ($48.72) and for January through September ($52.46).

“With a full quarter still to be reported, beef export value records are already being surpassed in some markets and global value is on track for $8 billion by year’s end,” said USMEF President and CEO Dan Halstrom. “Pork exports have also held up relatively well, but unfortunately the obstacles U.S. pork faces in China and Mexico are putting a lot of pressure on export value.”

New value record in Korea tops beef export highlights

South Korea has been the growth pacesetter for U.S. beef exports in 2018, and September was no exception. Exports to Korea were up 22 percent from a year ago in volume (19,116 metric tons) and were 29 percent higher in value ($143.1 million). January-September exports reached 180,495 metric tons, up 37 percent from a year ago, while export value soared 51 percent to $1.29 billion, already breaking last year’s full-year value record. These results included a 28 percent increase in chilled beef exports to 40,372 metric tons, valued at $391 million (up 38 percent). U.S. share of Korea’s total beef imports has increased sharply this year, from 44.7 to 48.7 percent, as U.S. beef underpins Korea’s growing beef consumption.

September beef exports to leading market Japan were up 4 percent from a year ago in both volume (28,086 metric tons) and value ($172.3 million). For the first three quarters of 2018, exports to Japan were up 7 percent from a year ago in volume (252,871 metric tons) while value increased 10 percent to $1.59 billion. Chilled beef exports to Japan were down 1 percent to 111,908 metric tons, but value still climbed 7 percent to $895 million. On a value basis, the U.S. is the top supplier to Japan with 46.8 percent of imports, up slightly from the first three quarters of 2017. But on a volume basis, U.S. beef accounted for just under 42 percent of total imports, down from 43 percent in the same period last year and trailing Australia’s 48.6 percent share. With the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) set to enter into force Dec. 30, the tariff advantage enjoyed by Australian beef will be extended to all of U.S. beef’s major competitors in Japan with another duty reduction on April 1, the start of Japan’s fiscal year.

For January through September, other highlights for U.S. beef exports include:

Beef exports to Taiwan were up 32 percent from a year ago in volume (43,539 metric tons), while value reached $403.8 million—up 36 percent and just short of last year’s annual record of $409.7 million. Chilled exports to Taiwan were up 29 percent in volume (17,523 metric tons) and 36 percent in value ($221 million), as the United States captured 75 percent of Taiwan’s chilled beef market—the highest market share of any Asian destination.

Exports to Mexico were up 1 percent from a year ago in volume (177,906 metric tons) and 8 percent higher in value ($783.1 million). With a strong fourth quarter, exports to Mexico should top $1 billion for the first time since 2015.

After slowing in the summer months, beef exports to China/Hong Kong rebounded in September (10,076 metric tons valued at $82 million). This pushed January-September results 6 percent higher than a year ago in volume (89,660 metric tons) and 28 percent higher in value ($720.8 million). This included exports to China of 5,114 metric tons valued at $44.2 million.

A strong performance in the Philippines and solid growth in Vietnam pushed beef exports to the ASEAN region 13 percent ahead of last year’s pace in volume (33,924 metric tons) and 25 percent higher in value ($186.6 million).

Strong September results pushed exports to South Africa 8 percent higher year-over-year in volume (11,508 metric tons), while value jumped 28 percent to $11.7 million. Exports to Angola also increased significantly in both volume (2,643 metric tons, up 15 percent) and value ($3.6 million, up 45 percent). Exports to Africa (which do not include Egypt) were down 8 percent in volume (16,880 metric tons) but still increased 8 percent in value ($18.9 million).

Korea, Latin America continue to shine for U.S. pork

September pork exports to South Korea increased 33 percent from a year ago in volume (12,486 metric tons) and 30 percent in value ($33.6 million). Through September, exports increased 43 percent in volume (172,022 metric tons) while export value climbed 48 percent to $489.2 million—already topping the 2017 year-end total of $475 million. U.S. share of Korea’s total pork imports has increased dramatically this year, from 31 to 35 percent, even as imports also trended higher from most of Korea’s main suppliers.

Pork exports to South America continued to gain momentum in September, led by strong growth in Colombia and Peru and a rebound in exports to Chile. Through the first three quarters of the year, exports to the region were 27 percent ahead of last year’s record pace in volume (92,252 metric tons) and 22 percent higher in value ($227.9 million).

With steady growth in mainstay markets Honduras and Guatemala and sharply higher shipments to Panama, El Salvador, Nicaragua and Costa Rica, January-September exports to Central America increased 20 percent in volume (58,756 metric tons) and 17 percent in value ($138.7 million). This region is also coming off a record year in 2017.

Exports to the Dominican Republic have already broken the records set last year, with volume climbing 35 percent to 32,859 metric tons, valued at $71.6 million (up 29 percent).

Other January-September results for U.S. pork exports

Exports to Japan increased 2 percent year-over-year in both volume (295,346 metric tons) and value ($1.22 billion). This included a 2 percent decrease in chilled pork volume (155,395 metric tons) while value held steady at $750 million. U.S. share of Japan’s total imports has held relatively steady this year at 35 percent. But with CPTPP set to enter into force Dec. 30 and with the Japan-EU Economic Partnership Agreement also on track to be implemented in the coming months, U.S. pork will soon face significant tariff disadvantages in its leading value market.

Despite a fourth straight month in which shipments were below last year’s level, exports to leading volume market Mexico remained 1 percent ahead of last year’s record pace at 589,235 metric tons. Export value, however, has felt intense pressure from Mexico’s retaliatory duties, dropping 8 percent to $1.01 billion. Canada’s January-September exports to Mexico were up 20 percent to 93,346 metric tons (valued at $126.5 million, up 25 percent). EU exports also surged to Mexico in July (1,809 metric tons, up 747 percent) and August (2,343 metric tons, up 733 percent) and are expected to continue gaining momentum as Spain, Denmark and Germany take advantage of Mexico’s recently implemented duty-free pork quota.

Exports to China/Hong Kong declined 26 percent from a year ago to 277,779 metric tons, with value dropping 14 percent to $667.9 million. This region is the largest destination for U.S. pork variety meat exports, which were down 27 percent in volume (177,747 metric tons) and 13 percent in value ($466.2 million).

Led by strong growth in the Philippines and Vietnam, exports to the ASEAN region increased 40 percent in volume (49,406 metric tons) and 29 percent in value ($123.5 million). This was fueled by a surge in pork variety meat exports to the region, which more than doubled over last year in both volume (20,111 metric tons, up 147 percent) and value ($32.2 million, up 122 percent).

With solid growth in Australia and a steady performance in New Zealand, exports to Oceania were 11 percent ahead of last year’s pace in volume (62,360 metric tons) and 10 percent higher in value ($182.3 million).

Lamb variety exports climb in September, but muscle cuts still sluggish

September exports of U.S. lamb more than doubled from a year ago to 1,177 metric tons (up 106 percent), fueled by a sharp increase in lamb variety meat exports to Mexico. But export value was down 12 percent to $1.63 million as muscle cuts continued to struggle. Lamb muscle cut exports were just 126 metric tons in September, down 53 percent from a year ago and matching the lowest monthly volume of 2018.

Through the first three quarters of the year, lamb exports were 65 percent ahead of last year’s pace in volume (9,210 metric tons) and 16 percent higher in value ($17.1 million). The increase is mainly attributable to stronger variety meat demand in Mexico, but muscle cut exports showed promising growth in the Bahamas, the United Arab Emirates, Taiwan and the Philippines.

If you have questions, please contact Joe Schuele at [email protected] or call 303-226-7309.