Rapid start to 2020 for US pork exports; beef exports also trend higher

Following a record-breaking performance in 2019, U.S. pork exports maintained a torrid pace in January, according to data released by USDA and compiled by the U.S. Meat Export Federation. January beef exports were also higher year-over-year, while exports of U.S. lamb trended lower.

January pork exports cooled slightly from the volume and value records established in December 2019, but still far exceeded year-ago levels. Both the January export volume of 273,603 metric tons, up 36% year-over-year, and export value ($738.7 million, up 50%) were the second highest on record. Export value per head slaughtered was $62.53, up 40% from a year ago. Exports accounted for 29.8% of total pork production and 27.4% for muscle cuts only, up substantially from last January’s percentages (23.6% and 20.3%, respectively).

Beef exports posted more modest growth in January, increasing 2.5% from a year ago in volume (107,374 metric tons) and 5% in value ($672.7 million). But beef muscle cut exports were the highest ever for the month of January at 81,342 metric tons, up 4% from a year ago, while muscle cut value increased 5% to $589.2 million. Export value per head of fed slaughter was $302.93, up 3% from a year ago. Exports accounted for 13.1% of total beef production, down slightly from a year ago, and 10.6% for muscle cuts only (steady with January 2019).

Release of the January export data comes as coronavirus is dominating news headlines, including those related to global trade. USMEF President and CEO Dan Halstrom said the virus has had an impact on red meat exports, which will likely be more evident in February and March data, but a number of supply and demand fundamentals and market access improvements have underpinned continued strong export volumes.

“The first quarantine actions in China were taken in late January and the calendar had turned to February before coronavirus became a major health concern in countries such as South Korea and Japan,” Halstrom said. “But despite logistical challenges, a severe decline in tourism and a notable impact on sit-down dining, overall demand for red meat in these markets is quite resilient. Retail meat sales have remained strong and both retailers and restaurateurs are utilizing e-commerce and delivery services at unprecedented levels. While it’s definitely a challenging situation, the Asian food industry is adapting to these conditions and finding creative ways to accommodate consumers.”

Pork exports to China/Hong Kong soar, but it’s not the only star performer

Pork exports to China/Hong Kong continued on a blistering pace in January, easing somewhat from the record volume reached in December but still increasing 263% from a year ago to 97,002 metric tons and climbing 361% in value to $245.3 million. The year-over-year increase was even more astonishing for pork muscle cuts, which were up 814% to 76,281 metric tons, valued at $194.7 million (up 1,297%). January exports included a significant share of carcasses (boxed primals), which totaled 35,358 metric tons, up from zero last year. Exports of bone-in hams and shoulders were 7,750 metric tons, up 569%.

Exports to Mexico, which were hampered by retaliatory duties in the first five months of 2019, increased 6% from a year ago in volume (70,460 metric tons) and jumped an impressive 40% in value to $134.7 million. Chilled bone-in ham and shoulder cuts remained the largest category for Mexico, totaling 42,542 metric tons, up 11% from last year and accounting for 75% of the chilled/frozen cut volume. Unit export values for pork cuts exported to Mexico were up 36% from last January.

“The January data really underscore the difficult situation U.S. pork was facing in Mexico a year ago,” Halstrom said. “Exporters kept much of the volume moving, but the U.S. industry absorbed most of the 20% duty in the form of lower prices. With duty-free access restored and the U.S.-Mexico-Canada Agreement moving toward implementation, we look forward to a continued rebound in Mexico’s demand for U.S. pork.”

January shipments to Japan, the perennial value leader for U.S. pork exports, were down 4% from a year ago in volume (31,578 metric tons) and 2% lower in value ($132.6 million). But Japanese import data paint a brighter picture, showing imports of chilled U.S. pork were up 13% to 17,890 metric tons. Imports of ground seasoned pork were record-large at 12,944 metric tons, up 95%, illustrating the importance of a restored level tariff playing field. USMEF projects an upward trend in Japan in 2020, due in part to tariff relief provided in the new U.S.-Japan trade agreement. The next round of tariff reductions will come April 1, when the Japanese fiscal year begins.

Taiwan, Mexico lead January beef export growth

The value of U.S. beef exports to Taiwan was record-high for the seventh consecutive year in 2019, and exports are off to a great start in 2020. January exports to Taiwan increased 24% from a year ago to 5,226 metric tons, valued at $43.5 million (up 18%). The United States dominates Taiwan’s chilled beef export market, capturing 75% market share last year and 83% in January 2020.

“The Taiwanese market is a remarkable success story for U.S. beef, especially for a country with fewer than 25 million residents,” Halstrom said. “U.S. beef has an ever-widening footprint in Taiwan that goes way beyond high-end dining and retail. By introducing a wider range of cuts, the U.S. industry and its importers and customers are finding new ways – including exciting new retail packaging and merchandising techniques – to capitalize on growing demand in Taiwan and make U.S. beef available to more and more consumers.”

January beef shipments to Mexico were up 4% from a year ago to 21,992 metric tons, while value jumped 15% to $117.2 million. Mexico is the largest destination for beef variety meat exports, which increased 9% to 9,438 metric tons, valued at $26.7 million (up 14%).

Coming off a record year in 2019, exports to South Korea remained strong in January, though volume was down slightly from a year ago (17,794 metric tons, down 1%) and value dipped 3% to $130.6 million. However, U.S. beef continues to capture greater market share in Korea and the outlook remains positive for export growth in 2020, despite Korea’s current economic challenges.

Beef exports to leading market Japan, which are also benefiting from lower tariff rates this year, declined 3% from a year ago in January to 25,205 metric tons, valued at $158.1 million (down 5%). On a more positive note, import data show chilled beef volume to Japan increased 14% to 10,686 metric tons. The tariff rate for U.S. beef muscle cuts dropped from 38.5% to 26.6% on Jan. 1 and will decline to 25.8% on April 1, the same rates imposed on major competitors in Japan.