November pork exports shatter previous records; beef exports trail 2018

U.S. pork exports posted the best month on record in November, easily reaching new highs in both volume and value, according to data released by USDA and compiled by the U.S. Meat Export Federation. November exports of U.S. beef were below the previous year’s large totals.

Pork exports surged to 259,812 metric tons (metric tons) in November, up 26% year-over-year and 11% above the previous high set in July 2019. Export value was $712.7 million, up 32% from a year ago and breaking the previous record (also from July 2019) by 14%. These results pushed January-November exports 7% above the previous year’s pace in volume (2.39 million metric tons) and 6% higher in value ($6.19 billion). Pork exports are now on pace to exceed previous records for both volume (2.45 million metric tons in 2017) and value ($6.65 billion in 2014).

Pork export value per head slaughtered was $62.90 in November, up 29% from a year ago and the highest in five years. Through the first 11 months of 2019, per-head value averaged $52.24, up 2% year-over-year. November exports accounted for 29.7% of total pork production and 26.8% for muscle cuts only, up substantially from a year ago (24.5% and 22%, respectively). For January through November, exports accounted for 26.4% of total pork production and 23% for muscle cuts, up from 22.4% and 25.7%, respectively, a year ago.

November beef exports totaled 108,662 metric tons, down 4% from a year ago, valued at $658.1 million (down 7%). For January through November, beef exports trailed 2018’s record pace by 3% in both volume (1.21 million metric tons) and value ($7.4 billion). However, 2019 is already the second-highest year for beef export value, trailing only the 2018 record of $8.33 billion.

Beef export value per head of fed slaughter was $307.55 in November, down 15% from a year ago. Through November, per-head export value averaged $308.74, down 4%. November exports accounted for 13.7% of total beef production and 11% for muscle cuts only, down from 14.1% and 11.8%, respectively, a year ago. For January through November, exports accounted for 14.1% of total beef production and 11.4% for muscle cuts, down from 14.5% and 12%, respectively, a year ago.

Pork surge to China/Hong Kong continues; export value to Mexico rebounds

Demand from China/Hong Kong continued to drive U.S. pork export growth in November, with volume climbing to 86,213 metric tons—up 284% from a year ago—valued at $204.9 million (up 240%). For January through November, exports to the region were up 71% to 554,789 metric tons, valued at $1.18 billion (up 49%).

Although November pork export volume to Mexico was lower than a year ago at 57,537 metric tons (down 6%), export value surged 28% to $124.3 million, the highest since July. For January through November, exports to Mexico were down 11% from a year ago in volume (641,952 metric tons) and 6% lower in value $1.14 billion. Competition from Canadian pork was especially strong in the Mexican market while Canada was suspended from China (late June to early November). From January through November, Canada’s exports to Mexico increased 8% from a year ago to 128,100 metric tons, valued at $185 million (up 14%).

“While the surge in pork shipments to China will capture most of the headlines this month, it is equally encouraging to see export value to Mexico make such a strong recovery,” said Dan Halstrom, USMEF president and CEO. “Getting exports to Mexico back to the record levels of 2017 and early 2018 is a top priority for the U.S. pork industry, because demand from Mexico is such an important driver of profitability for everyone in the supply chain. The same is true in Japan, so it’s very important to reclaim lost share in these longtime mainstay markets.”

November exports to Japan trailed the previous year by 3% at 32,594 metric tons, while value was down 1% to $136.5 million. Through the first 11 months of the year, exports to Japan were down 6% from a year ago in volume (340,568 metric tons) and 7% lower in value ($1.4 billion). Japanese import data show imports of U.S. pork decreased by $121 million with much of the decline being in ground seasoned pork, which fell by $73 million due to the wide tariff rate discrepancy. Beginning Jan. 1, Japan’s tariff rates on U.S. pork and pork products were lowered to match those imposed on European, Canadian and Mexican pork, eliminating a significant price disadvantage that slowed U.S. exports in 2019. The rate for U.S. ground seasoned pork fell from 20 to 13.3%.

Beef exports to Korea, Taiwan headed for new records

Although November beef exports to South Korea were lower than a year ago in volume (19,116 metric tons, down 5%) and value ($139 million, down 11%), the market remained on pace to break the 2018 records. Through November, exports to Korea were up 6% in both volume (234,310 metric tons) and value ($1.69 billion). U.S. share of Korea’s chilled beef imports reached 62%, up from 58% in 2018. U.S. beef accounted for 51% of Korea’s total beef and beef variety meat imports and more than one-third of Korea’s total beef consumption.

Beef exports to Taiwan will be record-large for the fourth consecutive year in 2019. November exports were 4,869 metric tons (up 8% from a year ago) valued at $43 million (up 7%). This pushed January-November results 8% ahead of the previous year’s pace at 57,837 metric tons, valued at $513.3 million (up 4%).

The gains in Korea and Taiwan have been offset by a decline in Japan, which is still the largest destination for U.S. beef exports but one in which the U.S. industry has faced a steep tariff rate disadvantage compared to imports from Australia, New Zealand, Canada and Mexico. Through November, exports to Japan were down 6% from a year ago in volume (287,090 metric tons) and dropped 7% in value ($1.8 billion). But on Jan. 1, U.S. beef gained tariff relief in Japan that brings rates in line with key competitors, so the outlook is very positive for 2020.

“The Japanese market performed extremely well for U.S. beef in 2018, even though we were already facing a tariff rate disadvantage versus Australia,” Halstrom explained. “More competitors saw tariff rate cuts in 2019 under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which further tilted the playing field against U.S. beef. For example, Canada’s beef exports to Japan increased 57% last year. So the rate cuts Japan recently implemented for U.S. beef are long overdue, and USMEF is working aggressively with U.S. exporters and the Japanese trade to capitalize.”

November lamb exports trend lower

November exports of U.S. lamb were 1,253 metric tons, down 10% from a year ago, while value also dipped 10% to $2.19 million. Through the first 11 months of 2019, lamb exports remained well ahead of the previous year’s pace in volume (14,507 metric tons, up 23%) and value ($23.7 million, up 11%). Led by strong demand in Mexico, lamb export volume is the largest since 2011 and export value is set to exceed $25 million for the first time since 2014. In addition to Mexico, growth markets in 2019 included Trinidad and Tobago, Panama, Guatemala and the Philippines.