August Exports strong for US pork; beef exports below last year

U.S. pork exports continued to post very strong results in August, according to data released by USDA and compiled by the U.S. Meat Export Federation, while beef exports were below the record-large totals of August 2018.

August pork exports increased 22% from a year ago to 221,586 metric tons, while export value climbed 19% to $588.8 million. These results pushed January to August export volume 4% ahead of last year’s pace at 1.7 million metric tons, while value increased 1% to $4.35 billion.

Pork export value averaged $54.18 per head slaughtered in August, up 22% from a year ago. For January through August, the per-head average was down 2% to $51.70. August exports accounted for 27.1% of total U.S. pork production and 23.7% for muscle cuts only, up significantly from a year ago (21.9% and 19.2%, respectively). January-August exports accounted for 26.4% of total pork production and 23% for muscle cuts, both up slightly year-over-year.

August beef exports totaled 114,119 metric tons, a 4% decline from last year’s large volume, while export value ($690.3 million) was down 8%. January-August beef exports were slightly below last year’s record pace, declining 2% in volume (881,526 metric tons) and 1% in value ($5.44 billion).

Beef export value per head of fed slaughter averaged $298.94 in August, down 7% from a year ago, while the January-August average was down 3% to $309.85. August exports accounted for 14% of total U.S. beef production and 11.3% for muscle cuts only, down from 14.3% and 12.2%, respectively, last year. Through the first eight months of the year, exports accounted for 14.2% of total beef production and 11.6% for muscle cuts, down from 14.6% and 12.1%, respectively, in 2018.

Emerging markets strong for U.S. pork, even as exports rebound to China and Mexico

Although still held back by China’s retaliatory duties, China/Hong Kong was the largest destination for U.S. pork in August at 63,656 metric tons, more than tripling the August 2018 volume, while export value climbed 160% to $137.6 million. For January through August, exports to China/Hong Kong were up 38% in volume (356,322 metric tons) and 17% in value ($717.9 million).

Since Mexico removed its 20% retaliatory duty on U.S. pork in late May, exports have rebounded significantly but are still trailing the record-large numbers posted in 2017. August exports to Mexico were down 1% year-over-year in volume (61,365 metric tons), but value increased 18% to $121.1 million. A slow start to the year still weighs on January-August exports to Mexico, which were down 11% from a year ago in both volume (473,309 metric tons) and value ($821.8 million).

“China’s demand for imported pork has increased steadily over the past few months and the U.S. industry is well-positioned to help fill that need,” said USMEF President and CEO Dan Halstrom. “But the really positive story behind these numbers is that even as U.S. exports to China/Hong Kong have surged and exports to Mexico rebounded after the removal of retaliatory duties, demand in other markets is proving resilient and continues to grow. This is exactly why the U.S. industry invested in emerging markets over the years, and it is definitely paying dividends.”

The U.S. and Japan recently announced an agreement that will bring tariffs on U.S. pork in line with those imposed on major competitors, and August export results illustrated the pressing need for tariff relief. August volume was down 19% to 28,240 metric tons, while value fell 18% to $120.1 million. Through August, exports to Japan trailed last year’s pace by 6% in both volume (250,540 metric tons) and value ($1.03 billion). U.S. exports of ground seasoned pork to Japan have been hit particularly hard by the tariff gap (20% compared to 13.3% for the European Union and Canada), with Japan’s imports through August falling by 28% — nearly $60 million — compared to last year.

U.S. beef exports cool in August, but remain on strong pace

After setting new value records in June and July, U.S. beef exports to South Korea slowed 9% from a year ago in August to 22,307 metric tons, while value dropped 11% to $157.4 million. But for January through August, exports to Korea were still 8% ahead of last year’s record pace in volume (174,290 metric tons) and 10% higher in value ($1.26 billion). Korean import data through August showed double-digit growth for U.S. beef in the top two cut categories: short rib and short plate/brisket. The United States accounted for more than 55% of Korea’s chilled/frozen beef import volume, up from 53% in the first eight months of 2018.

Similar to pork, the U.S. beef industry looks forward to gaining tariff relief in leading market Japan, where August exports slipped 15% from a year ago to 28,646 metric tons. Value was down 22% to $164.3 million, although it is important to note that exports in August 2018 were a post-BSE record $209.3 million. For January through August, exports to Japan were 3% below last year’s pace in volume (217,698 metric tons) and 4% lower in value ($1.36 billion). Beef variety meat exports to Japan (mainly tongues and skirts) have been a bright spot in 2019, increasing 31% in volume (44,617 metric tons) and 18% in value ($260 million). U.S. tongues and skirts face higher duty rates than competitors’ products but are tariffed at 12.8% compared to 38.5% for U.S. muscle cuts.

“The U.S. beef industry is extremely excited at the prospect of lower tariffs in Japan, as 38.5% is the highest rate assessed in any major market,” Halstrom said. “As we’ve seen in Korea, where the tariff rate was once 40% but has been reduced by more than half, lower tariffs make U.S. beef even more affordable for a wider range of customers. While the agreement still needs parliamentary approval in Japan, importers are already enthused and preparing for long-awaited tariff relief.”

January to August beef exports to China/Hong Kong fell 24% from a year ago in volume (60,259 metric tons) and 20% in value ($510.7 million). Several factors have impacted U.S. exports to the region, including street protests in Hong Kong that have slowed commerce and tourism. While supermarket sales remain strong in Hong Kong, the disruption has been particularly hard on the restaurant sector. Although China remains a small destination for U.S. beef and exports are hampered by China’s retaliatory duties, January-August volume increased 23% from a year ago to 5,625 metric tons, valued at $44.7 million (up 12%).

Lamb exports trend lower in August

August exports of U.S. lamb were down 12% year-over-year at 1,193 metric tons, while value declined 8% to $1.84 million. For January through August, exports remained 32% above last year’s pace at 10,626 metric tons, while value increased 13% to $17.5 million. Lamb muscle cut exports were 17% lower than a year ago in volume (1,397 metric tons) but slightly higher in value ($9.5 million, up 1%). Markets showing promising muscle cut growth included the Dominican Republic, Trinidad and Tobago and Panama.

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