U.S. Beef, Pork Exports Sluggish in May
July 8, 2015
After an encouraging performance in April, exports of U.S. beef and pork lost momentum in May, falling below year-ago levels in both volume and value according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).
Beef exports moved counter-seasonally lower in May, dropping 14 percent from a year ago to 88,466 metric tons (mt). Export value dipped lower year-over-year for the first time since January, reaching only $556.7 million (down 6 percent). For January through May, exports totaled 430,393 mt, down 10 percent from the same period in 2014. Export value remained ahead of last year's pace at $2.68 billion (up 2 percent).
January-May beef exports equated to 13 percent of total beef production and 10 percent for muscle cuts only – down from 14 percent and 10.6 percent, respectively, last year. Export value per head of fed slaughter averaged $291.70, up 9 percent from a year ago.
Pork exports totaled 184,865 mt in May, down 2 percent from a year ago, while value slipped 18 percent to $489.2 million. Through the first five months of 2015, pork exports were down 6 percent in volume (910,967 mt) and 15 percent in value ($2.42 billion) from the same period last year.
January-May pork exports equated to 25 percent of total production and 21 percent for muscle cuts only – down from 28 percent and 23 percent, respectively, a year ago. Pork export value per head slaughtered averaged $51.39, down 19 percent from the first five months of 2014.
Korea a bright spot for U.S. beef
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Beef exports to South Korea remained strong in May, increasing 5 percent from a year ago in volume (9,740 mt) and 11 percent in value ($64.8 million). This pushed January-May exports to Korea 4 percent higher in volume (48,568 mt) and 9 percent higher in value ($341.9 million). The market could see a short-term slowdown, however, due to the toll the recent outbreak of Middle East respiratory syndrome (MERS) has taken on consumer spending in Korea. MERS was first diagnosed in Korea on May 20, but became a major public health concern in early June.
"Although MERS is not a food safety issue, its impact on Korea's restaurant sector was dramatic in June," explained Philip Seng, USMEF President and CEO. "Fortunately our staff in Korea reports that the situation has improved significantly this month, with consumer activity beginning to return to normal. We expect beef demand in the Korean market – which is one of our strongest performers in 2015 – to rebound fairly quickly."
Another bullish factor is Korea's domestic beef prices, which soared to near-term highs in June, reflecting relatively tight supplies.
Results for U.S. beef in other Asian markets have been mixed so far in 2015, with most struggling to keep pace with last year's import volumes. Exports to Japan slumped in May, falling 10 percent from a year ago in volume (17,964 mt) and 15 percent in value ($106.9 million). Through May, exports to Japan remained modestly higher than a year ago at 88,936 mt (up 2 percent) valued at $564.6 million (up 3 percent).
Other January-May results for U.S. beef included:
Exports to Hong Kong fell 17 percent in volume (49,264 mt) and 8 percent in value ($370.4 million).
Export value to Taiwan managed a solid increase ($117.5 million, up 13 percent) despite a 5 percent decline in volume (12,321 mt).
Although exports to the ASEAN region were down 23 percent in volume (9,155 mt), export value was still up 14 percent to $63.5 million. Major destinations performed well, with exports exceeding year-ago levels to the Philippines, Vietnam and Singapore. The regional drop in export volume was mostly due to a sharp decline in exports to Indonesia (624 mt, down 85 percent), driven in large part by restrictive import regulations and a severely weakened currency.
While beef export value has managed to stay in positive territory in most Asian markets, Seng cautions that the U.S. industry faces a volatile business climate.
"Lack of access to China, which never reopened after the 2003 BSE case, is definitely holding back our export growth," he said. "China is a burgeoning market that impacts prices and product flow throughout a large region and its influence on global beef trade is growing rapidly. Exporting to China would significantly expand the presence of U.S. beef in Asia, but we remain on the sidelines as our competitors gain a stronger foothold."
Just four years ago, China's beef imports totaled only $112 million for an entire calendar year. Through May of this year, imports exceeded $700 million – up 17 percent from the record pace of 2014. Primary suppliers are Australia, Uruguay, New Zealand and Argentina.
Pork exports slip to mainstay destinations Japan, Mexico
After a relatively strong performance in April, pork exports to Japan and Mexico took a step back in May. Export volume to Japan dipped 9 percent from a year ago to 39,340 mt, while value was down 18 percent to $152.9 million. Through the first five months of the year, exports to Japan were down 11 percent in volume (189,188 mt) and 18 percent in value ($705.2 million).
May exports to Mexico were the lowest in 19 months at 53,186 mt, down 6 percent from a year ago. Export value fell by nearly one-third to $95.1 million. For January through May, exports to Mexico remained 5 percent ahead of last year's pace in volume (291,184 mt) but were down 17 percent in value ($508.7 million), reflecting the decline in pork prices from last year's record levels.
Other January-May results for U.S. pork included:
Exports to Korea cooled slightly in May but remain on a very strong pace, with volume up 38 percent to 95,686 mt and value up 37 percent to $285.1 million. Pork demand also took a short-term hit due to MERS, but should be strong in coming months as domestic production is taking longer than expected to recover from the impact of recent outbreaks of PEDV and FMD. Korea's domestic pork carcass prices edged slightly lower June but still averaged $2.40 per pound – among the highest in the world.
Growth to Honduras and Guatemala offset smaller volumes to Colombia, resulting in steady volume to Central/South America (51,257 mt). Export value was down 3 percent to $132.8 million. The outlook for this region looks positive as exports to Colombia gained momentum in May and shipments to Honduras and Guatemala have surged even higher in recent weeks.
Limited access to China, which only a small number of U.S. pork plants are eligible to serve, continues to dampen exports to the China/Hong Kong region – a critical destination for selected pork and pork variety meat items, especially with China's hog prices hitting multi-year highs. Export volume was down 21 percent from a year ago to 130,525 mt and value fell 26 percent to $273.6 million. The European Union is dominating the region's imported pork market, accounting for nearly 70 percent of pork entering China/Hong Kong.
Exports to the ASEAN region were down sharply, falling 51 percent in volume (16,200 mt) and 58 percent in value ($35.5 million) on lower shipments to the Philippines and Singapore.
"The tremendous influx of lower-priced European pork has reshaped the competitive landscape in Asia," Seng noted. "The European industry has aggressively targeted Japan and China, successfully capturing market share. But we're also seeing a significant impact in smaller markets such as the Philippines, Taiwan, Singapore and Australia, and Korea continues to be a strong destination for European pork. While this surge was prompted by the closure of the Russian market, this is not a short-term phenomenon. There has been a significant transition in global pork trade patterns and we expect it to have a lasting impact."
Russia was traditionally the largest destination for EU pork, but suspended imports in January 2014 due to African swine fever. Russia also included pork from the EU, U.S. and Canada in the trade embargo imposed last year as a result of the ongoing conflict in Ukraine. Russia recently announced that it would extend this embargo through June 2016, meaning that large supplies of European pork will continue to flow to other markets. The weakened euro – currently down about 22 percent year-over-year versus the U.S. dollar – has also bolstered the competitiveness of EU pork.
May lamb exports rebound slightly, but remain lower year-over-year
After hitting a low point for the year in April, May lamb exports rebounded to some degree, reaching 901 mt (steady with last year) valued at $1.68 million (down 29 percent). Through May, 2015 exports were down 18 percent in volume (3,679 mt) and 26 percent in value ($8.27 million) from a year ago. While lamb exports have achieved promising growth in emerging markets in the Middle East and the Caribbean, these gains were offset by sharp declines to Canada and Mexico.
Complete January-May export results are available on the USMEF statistics webpage. For more information, please contact Joe Schuele at email@example.com or 303-226-7309.
Export statistics refer to both muscle cuts and variety meat unless otherwise noted.
One metric ton (mt) = 2,204.622 pounds.
–U.S. Meat Export Federation