Export markets are bright spot for U.S. pork/beef industries
April 28, 2008
Continued success in the export market helped buoy the U.S. pork industry in the first two months of 2008, while U.S. beef exports continue to post solid gains over the previous year, according to data released by the U.S. Department of Agriculture (USDA) and compiled by the U.S. Meat Export Federation (USMEF).
“The growth engine for the U.S. meat industry will continue to be the export market,” said Philip M. Seng, USMEF president and CEO. “The weakened U.S. dollar, competitive pricing for U.S. exports, and declining production by some of our competitors combine to create conditions that support continued growth internationally.”
The U.S. pork industry enjoyed its fifth consecutive month of record-breaking exports (including variety meats) in February. Exports in February reached 346 million pounds (156,969 metric tons), an increase of 6 percent over the record set in January, and a 55 percent jump over export totals from February 2007.
“Pork production is running 12 percent over last year, making it impossible to raise prices to cover the ever-increasing costs of production,” said Erin Daley, USMEF manager of research and analysis. “Without pork exports, at these production rates the U.S. market would have to absorb the equivalent of an additional 60,000 hogs per day, which would drive prices down significantly.”
For the two-month period (January-February 2008), pork plus pork variety meat exports were up 41 percent, totaling 671.6 million pounds (304,651 metric tons) valued at $685 million.
The U.S. beef industry export news also is positive. Exports of beef muscle cuts increased 36 percent to 168.5 million pounds (76,445 metric tons) when compared to the same two-month period in 2007, and beef variety meat exports increased 17 percent to 118 million pounds (53,529 metric tons) for a combined total of 286.5 million pounds (129,974 metric tons) valued at $442 million, an increase of 40 percent.
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– Mexico continues to be the largest destination for U.S. beef products, with exports of beef plus beef variety meats up 21 percent to 143.9 million pounds (65,286 metric tons) for the first two months of 2008. Exports to Mexico were about 50/50 beef and beef variety meats, with beef growing 12 percent while variety meat exports increased 32 percent.
– Canada was again the second-largest U.S. beef export customer with a 66 percent increase to 46.6 million pounds (21,151 metric tons). However, February exports dropped below 10,000 metric tons (22 million pounds) for the first time since May 2007, totaling 9,312 metric tons or 20.5 million pounds – still 54 percent larger than the February 2007 export volume.
– Japan: exports to Japan trended higher in February at 8.1 million pounds (3,681 metric tons), 40 percent more than in February 2007 and 19 percent greater than January 2008. Combined January/February exports totaled 14.9 million pounds (6,783 metric tons) valued at nearly $37 million, an increase of 25 and 43 percent respectively.
– ASEAN: February exports to the ASEAN region hit 8.4 million pounds (3,842 metric tons), surpassing the record set in October 2007, with Vietnam as the top destination followed by the Philippines. For the January/February period, exports (primarily muscle cuts) totaled 15.5 million pounds (7,058 metric tons), a 439 percent increase. Of that total, 12 million pounds (5,464 metric tons) were bound for Vietnam and 2.9 million pounds (1,338 metric tons) to the Philippines. USMEF has been aggressively promoting the reintroduction of bone-in U.S. beef in the Philippines and continues to educate Vietnamese importers and chefs about the benefits of U.S. beef.
– Taiwan: beef exports to Taiwan increased 21 percent to 8.5 million pounds for the two months (3,873 metric tons). Exports in February alone were nearly 4.5 million pounds (2,039 metric tons), 58 percent larger than February 2007 and 11 percent larger than January 2008. Export growth to Taiwan is impressive considering the 30 percent increase in export value (totaling $18.6 million).
– EU: Beef exports for the two-month period were 4.8 million pounds: 329 percent larger than the same period last year. The Netherlands was the largest destination at 2.9 million pounds. February exports to the EU were 2.7 million pounds (1,227 metric tons) – a total surpassed in recent years only by exports in 1998 and 2000. However, USMEF notes that U.S. exports (reported by the Department of Commerce) are significantly larger than EU imports, reported by the European Commission. For example, Department of Commerce stats for January 2008 exports show 2.1 million pounds versus 465,170 pounds a year ago, while EU stats show 544,536 pounds of beef imports from the United States this January versus 94,797 pounds a year ago.
Daley noted that the EU ban on most Brazilian beef imports has resulted in record high prices for Uruguayan beef as exporters try to fill the large void left by the lack of exports from the primary supplier to the EU market. Argentina, the second largest EU beef supplier, is battling its own domestic constraints, and exports have essentially stalled as the beef export quotas/taxes are debated. The recent WTO ruling against the EU hormone ban will hopefully lead to expanded access for U.S. beef in the near future. “Expected shortages of beef in the EU market could make the coming months an opportune time for more U.S. beef exports to Europe,” said Daley.
– Beef Variety Meats: Mexico remains the top export market, with a 32 percent increase to 71.8 million pounds (32,598 metric tons). Exports to the Middle East dipped 13 percent and totaled 28.9 million pounds (13,109 metric tons), with a 15 percent drop in variety meat (liver) exports to Egypt. At the same time, variety meat exports to Canada jumped 81 percent to 3.8 million pounds (1,746 metric tons); 94 percent to Central and South America (mainly Peru, up 192 percent to nearly 1.6 million pounds); 645 percent to the Philippines (to 1.3 million pounds), and 42 percent to Russia (1.1 million pounds).
On a volume basis, China/Hong Kong was the largest market for U.S. pork and pork variety meats for January/February 2008 (164.7 million pounds or 74,745 metric tons – a 287 percent increase over the same time period in 2007). However, Japan remains No. 1 on a value basis at $210.9 million, or 31 percent of total pork and pork variety meat export value.
Other highlights from the two-month period for pork plus pork variety meat exports:
– Japan: up four percent to 143 million pounds (64,927 metric tons)
– Mexico: up two percent to 122 million pounds (55,384 metric tons), but still trailing the record export volumes of 2006
– Canada: up 28 percent to 59.4 million pounds (26,955 metric tons). Exports were basically on track with the strong volumes recorded during the final quarter of 2007, reflecting large live hog imports from Canada
– Russia continues to be a tremendous growth market: 164 percent growth to 58.9 million pounds (26,716 metric tons, including 21,812 metric tons of muscle cuts and 4,904 metric tons of variety meats). “This is an excellent example of the competitiveness of U.S. pork, enhanced by the weak dollar,” noted Daley. February exports at 34.8 million pounds (15,786 metric tons) were nearly equal to the monthly record of 35.1 million pounds set in November 2007.
– South Korea: down 2 percent to 53 million pounds (24,051 metric tons), but February exports were larger than any monthly volume last year with the exception of December. Also note that South Korean import statistics show imports from the United States up 10 percent while imports from the EU are down 16 percent and those from Canada are down 10 percent.
– ASEAN: exports to the Philippines increased 141 percent to 7.6 million pounds (3,470 metric tons) and exports to Vietnam grew from essentially zero to 2.4 million pounds (1,099 metric tons). Total exports to the region in February (nearly 6.7 million pounds) surpassed the monthly record set in December 2007.
– EU: exports were up 83 percent to 11.6 million pounds (5,275 metric tons), primarily destined for France (4.4 million pounds), Germany (1.8 million pounds) and Italy (1.3 million pounds). However, USMEF notes that U.S. exports (reported by the Department of Commerce) are significantly larger than EU imports, reported by the European Commission. For example, Department of Commerce pork export stats for January 2008 show 3.8 million pounds while EU stats show 2.0 million pounds of beef imports from the United States.
– Caribbean: up 42 percent to 8.3 million pounds (3,780 metric tons), including exports to the Dominican Republic (up 200 percent to nearly 2.8 million pounds).
– Central and South America: up four percent to 11.7 million pounds (5,337 metric tons) led by Honduras (up three percent to 3.5 million pounds).
– Oceania: down 16 percent to 14.6 million pounds (6,635 metric tons), but Daley notes the good news that the Australian Productivity Commission released its final report and did not recommend safeguard action against pork exports to Australia. Therefore, the United States can continue to export pork to Australia duty-free.
– Taiwan: down 19 percent to 5.1 million pounds (2,341 metric tons) as market access issues continue to impede U.S. pork exports.