July pork exports reach new heights; beef and lamb exports also strong

U.S. pork exports were record-large in July while beef exports were relatively steady with last year’s strong results, according to data released by USDA and compiled by the U.S. Meat Export Federation.

July pork exports surged to 233,242 metric tons, up 32% year-over-year and topping the previous record from April 2018. Export value was $623.3 million, up 34% and breaking the previous high reached in November 2017. These results pushed January-July exports 2% ahead of last year’s pace at 1.48 million metric tons while value was down 2% at $3.77 billion.

Pork export value averaged $58.92 per head slaughtered in July, up 22% from a year ago and the highest in five years. January-July export value averaged $51.33 per head, down 5% from the same period last year. July exports accounted for 29.3% of total U.S. pork production (up from 24.7% a year ago and the highest since April 2018) and 25.9% for muscle cuts only (up from 21.7% and the highest ratio in five years). For January through July, exports accounted for 26.3% of total pork production and 22.9% for muscle cuts (down from 27% and 23.3%, respectively, a year ago).

Beef exports increased 1% year-over-year in July to 117,842 metric tons. Export value ($720.4 million) was down slightly from a year ago but still the seventh-highest monthly total on record. January-July beef exports were down 2% from a year ago in volume (766,607 metric tons) while export value ($4.75 billion) was slightly below last year’s record pace.

Beef export value per head of fed slaughter averaged $308.47 in July, down 7% from a year ago, while January-July export value averaged $311.51 per head, down 2%. July exports accounted for 14.4% of total U.S. beef production and 11.8% for muscle cuts only, down from 15.1% and 12.9%, respectively, last year. For the first seven months of the year, exports accounted for 14.1% of total beef production and 11.6% for muscle cuts—each down one-half percentage point from a year ago.

Momentum builds for U.S. pork in Mexico and China; Japan results steady

Since Mexico lifted its 20% retaliatory duty on U.S. pork in late May, exports have rebounded significantly. In July, exports to Mexico reached 67,161 metric tons, up 19% from a year ago, while value surged 38% to $126.7 million. January-July results still trail last year by 12% in volume (411,944 metric tons) and 14% in value ($700.7 million), but exports to Mexico are well-positioned for a strong second half of 2019.

“USMEF anticipated a rebound in Mexico once duty-free status was restored for U.S. pork,” said USMEF President and CEO Dan Halstrom. “But I want to emphasize that we did not take this recovery for granted. While those retaliatory duties were in place, USMEF ramped up our outreach with processors and other major buyers in Mexico and worked closely with them to keep product moving south, and with the duties removed we’re seeing the results of these efforts. Now ratification of the U.S.-Mexico-Canada Agreement is critical to ensure long-term duty-free access to this key market.”

Although held back by China’s retaliatory duties on U.S. pork, exports to China/Hong Kong contributed mightily to the July volume and value records. Exports to the region were a record 68,657 metric tons in July, more than tripling from a year ago, while value climbed 173% to a record $152.5 million. For January through July, exports to China/Hong Kong were up 23% in volume (292,666 metric tons) and 3% in value ($580.3 million). China’s hog prices soared to record levels in August, and retail pork and poultry prices are also trending sharply higher as China’s African swine fever-related hog shortage intensifies.

In leading value market Japan, where no new duties have been imposed but U.S. pork faces higher tariff rates than its competitors, July exports were steady with last year at 31,019 metric tons, while value was up 5% to $133.2 million. Through July, exports to Japan were down 3% in volume (222,300 metric tons) and 4% in value ($906.7 million). The White House recently announced an agreement in principle with Japan that is expected to bring tariffs on U.S. pork and beef in line with competitors’ rates, but the agreement still must be finalized and the timeline for implementation is not yet known.

Another record month for U.S. beef in Korea

South Korea continues to be the growth pacesetter for U.S. beef exports, as July volume reached 25,104 metric tons (up 6% from a year ago). This included 24,192 metric tons of beef muscle cuts, also up 6% and setting a new monthly volume record. Export value was $181.3 million, up 7% from a year ago and breaking the record set the previous month. For January through July, beef exports to Korea climbed 11% in volume (151,983 metric tons) while export value ($1.1 billion) exceeded last year’s record pace by 14%.

“The Korean market is a remarkable success story and a blueprint for what U.S. beef can achieve when consumers are not shouldering such a heavy tariff burden,” Halstrom said. “With the duty rate now less than half of its pre-FTA level, U.S. beef is enjoyed by more Korean consumers than ever, and in a wider variety of venues. This will also happen in Japan when duty rates come down, but on an even larger scale.”

Though Korea is gaining, Japan remains the largest volume and value destination for U.S. beef. July exports slipped 2% from a year ago to 31,213 metric tons, with value down 4% to $188.4 million. Through the first seven months of the year, exports to Japan were 1% below last years’ pace in both volume (189,052 metric tons) and value ($1.2 billion). Strong variety meat exports (especially tongues and skirts) have helped offset a slowdown in U.S. chilled beef exports to Japan. Through July, variety meat volume was up 30% from a year ago to 38,249 metric tons, valued at $228.8 million (up 21%). Although U.S. beef pays higher tariffs than competitors for variety meat, the rate for U.S. tongues and skirts is 12.8% compared to a 38.5% tariff on U.S. muscle cuts. Competitors pay 5.7% and 26.6%, respectively.

Lamb variety meats push July exports higher

Strong variety meat demand in Mexico and the Caribbean pushed July exports of U.S. lamb 36% higher year-over-year in volume (1,650 metric tons), while value increased 11% to $2.4 million—the highest since February. For January through July, lamb exports were 41% above last year’s pace at 9,433 metric tons, while value increased 16% to $15.6 million. Muscle cut exports were lower than a year ago in volume (1,290 metric tons, down 16%) but edged 2% higher in value to $8.6 million. Markets showing promising muscle cut growth include the Dominican Republic, Trinidad and Tobago, Panama and Guatemala.

If you have questions, please contact Joe Schuele at [email protected] or call 303-547-0030.