USMEF: US Pork, Beef Exports Post Solid Gains in May

U.S. pork and beef exports continued their strong 2010 performance in May, collectively growing 25 percent in value versus 2009 and 8 percent over April of 2010, according to statistics released by USDA and compiled by the U.S. Meat Export Federation (USMEF). At $769.5 million, U.S. red meat exports reached their highest monthly value since October 2008.

For producers, the gain in export value per animal processed in May was impressive: $53.10 per animal on the pork side – nearly 30 percent higher than the $40.90 recorded in May 2009. For beef, export value equated to $160.30 per steer and heifer slaughtered compared to $122 at this time last year – an increase of about 31 percent.

May pork export value increased 22 percent over a year ago and 5 percent from April 2010, reaching $419.3 million. Export volume of 162,865 metric tons (359 million pounds) was up 13 percent over last year and 4 percent from the previous month.

The pork industry is seeing a higher return per pound on its exports in 2010. The value of those exports hit $1.9 billion for the first five months of 2010, a 5 percent increase over last year. At the same time, the volume of exports this year is 787,869 metric tons (1.7 billion pounds), essentially even with last year’s pace.

Pork muscle cut exports are up 4 percent in volume and 9 percent in value over last year, while variety meat exports are down 13 percent and 14 percent, respectively.

On the beef side, exports are running stronger than last year in virtually all major markets except Mexico. Global exports of 90,930 metric tons (200 million pounds) valued at $349 million were 12 percent higher in volume and 25 percent higher in value than in May 2009. This pushed the cumulative 2010 results to 398,879 metric tons (more than 879 million pounds) valued at $1.5 billion – an increase of 11 percent in volume and 19 percent in value over last year’s pace.

Beef muscle cuts are performing even more impressively, increasing 25 percent in volume and 29 percent in value over January through May 2009. Similar to what the pork industry is seeing in variety meat, beef variety meat exports are down 12 percent and 21 percent, respectively.

“The recognition of the quality and value of U.S. beef, pork and lamb is growing in the international markets,” said USMEF President and CEO Philip Seng. “The feedback we receive from both buyers and consumers tells us that even with the gains we are seeing, there are opportunities for continued export growth in key segments and niches of even the most well-developed markets, like Japan and South Korea.”

USMEF Chairman Jim Peterson, a rancher from Buffalo, Mont., added that gaining and maintaining access to key markets such as Russia and China are critically important to the bottom line of U.S. producers.

“The value of exports per head we saw in May – more than $53 per head in pork and $160 per head in beef – is a vivid illustration of how important it is for producers to put resources into our key export markets,” said Peterson. “The bulk of the growth in sales and profitability that our industry can expect in the future will come from the international marketplace, and USMEF is working hard to ensue that growth is achieved.”

May pork exports solid worldwide, with boost from resumption of Russia, China trade Though well below last year’s pace, the recent resumption of exports to Russia and China have begun to have a positive impact on the global results for U.S. pork. Exports to Russia are still around 50 percent below the first five months of 2009 in both volume (24,386 metric tons or 53.8 million pounds) and value ($55 million). But May results showed significant progress as exports returned to 88 percent of the volume and 97 percent of the value achieved in May 2009. The picture is similar in China, where the cumulative 2010 total is still quite small but May exports were down only 15 percent from one year ago and the value ($10.2 million) was actually 31 percent higher. (It was in late May 2009 when China effectively closed to U.S. pork due to A-H1N1 influenza.) Mexico continues to be the largest volume destination for U.S. pork, increasing 7 percent in volume (225,672 metric tons or 497.5 million pounds) and 27 percent in value ($401.5 million) over the record pace established in 2009. May exports slowed slightly compared to the previous month, however, due in part to record-high ham prices.

Exports to Japan, by far the largest foreign market for U.S. pork in terms of value, remain below last year’s pace but are showing signs of recovery from the slump encountered in early 2010. May exports exceeded the year-ago level by 18 percent in both volume and value, raising the cumulative total to 180,326 metric tons (397.5 million pounds) valued at $671.2 million. For the year, pork exports to Japan remain down 6 percent in volume and 3 percent in value from 2009. Muscle cut exports to Japan are within 4 percent in volume and 2 percent in value of their 2009 pace, but variety meat exports are down by about one-third.

Pork exports to Hong Kong continued their strong momentum in May, with the cumulative 2010 total reaching 95,686 metric tons (nearly 211 million pounds) valued at $135.2 million – an increase of 40 percent in volume and 24 percent in value. Hong Kong is a considerable bright spot for pork variety meat, with exports up 56 percent in volume and 44 percent in value. Muscle cut exports to Hong Kong also have increased in both volume (23 percent) and value (11 percent) over the first five months of 2009.

Other market highlights include:

• Exports to Canada are up 15 percent in volume (73,810 metric tons or 162.7 million pounds) and 25 percent in value ($246.5 million) over January to May 2009. Through June, live hog imports from Canada were 16 percent smaller than last year at 2.79 million head. This is roughly one quarter of Canadian hog slaughter, compared to about 30 percent over the same period last year.
• The Philippines has emerged as a tremendous growth market for U.S. pork, with volume nearly doubling over last year (to 29,227 metric tons or 64.4 million pounds) and value increasing by 119 percent to more than $55 million. Despite a slowdown in Vietnam, exports to the ASEAN region have increased 57 percent in volume and 73 percent in value compared to the start of 2009.
• May exports to Central and South America were down slightly from April but the cumulative total increased 42 percent in volume (25,264 metric tons or 55.7 million pounds) and 46 percent in value (to $56.4 million) over last year. The top markets of Honduras, Guatemala and Colombia all achieved significant growth.

After a strong showing in April, pork exports to South Korea slowed again in May as the yearly total fell about 25 percent below last year’s pace. Monthly exports were about even in volume with May 2009, and actually exceeded their year-ago value by about 10 percent. Exports in May 2009, however,were unusually low due to the A-H1N1 influenza scare. When compared to May 2008, exports to Korea were down by about one-third.

One factor behind this decline has been the rising price of U.S. picnics, a mainstay export item to Korea. Picnics are primarily used in processing, so they tend to be price-sensitive. Korea’s domestic pork production is up about 8 percent over last year, resulting in a drop in prices of more than 10 percent. The United States is still the largest foreign supplier of pork to Korea, but Chile has emerged as a top competitor. Chilean pork faces lower tariffs in Korea due to recent implementation of a bilateral free trade agreement.

“Despite some challenges in Korea, we’re seeing strong results for U.S. pork in most of our key destinations,” Seng said. “Mexico has proven to be very resilient to rising pork prices, as have many of our Asian markets. Rising prices can sometimes create issues in these markets, but so far consumers are clearly willing to pay for the quality delivered by U.S. pork. In the one market where price seems to be a hindrance, we’re being undersold in part because of an imbalance in tariff rates.”

Beef exports continue to surge overseas, but still struggling in Mexico

Beef exports to all key Asian markets grew significantly over last year, with exports also on the rise in critical regions such as the Middle East, Russia, Europe and the Caribbean. Exports to Canada are also up for the year by 6 percent in volume and 9 percent in value, though May exports to Canada were below last year’s level.

Mexico is still the No. 1 market for U.S. beef in terms of both volume and value, but has not enjoyed the rebound achieved so far this year in all other major markets. Exports to Mexico are down 26 percent in both volume (95,802 metric tons or 211 million pounds) and value ($310 million) compared to January-May 2009. Muscle cut exports to Mexico have fared better – down 9 percent in volume and 7 percent in value. But variety meat exports continue to struggle, falling 45 percent in volume and 60 percent in value from last year.

The outlook is much brighter in other key markets. Korea, for example, overtook Japan and Egypt to become the No. 3 volume market for U.S. beef, increasing 66 percent over January through May of last year to 37,117 metric tons (81.8 million pounds). Korea is fourth-largest in terms of value (behind Mexico, Canada and Japan) at $162.8 million – an increase of 94 percent over last year. In May, beef exports to Korea were more than three times the volume and nearly four times the value seen in May 2009.

Export growth to Japan also has been impressive, with volume reaching 36,698 metric tons (80.9 million pounds) valued at $193.25 million for the first five months of 2010. This is an increase of 26 percent in volume and 27 percent in value over last year’s pace. May export totals were up about 7 percent in volume and 10 percent in value over May 2009.

Beef exports to Russia have nearly tripled in volume (26,048 metric tons or 57.4 million pounds) over last year, while rising nearly 700 percent in value (to $70.4 million). This reflects a growing appetite in Russia for U.S. beef muscle cuts, whereas last year’s exports were almost exclusively limited to variety meat. But even as muscle cut exports to Russia have exploded, variety meat exports are still up by 49 percent in volume and 178 percent in value over last year.

Other market highlights include:

• Exports to Hong Kong are nearly double last year’s volume (10,731 metric tons or 23.7 million pounds) and increased 124 percent in value to $42.1 million. May exports were actually lower in volume than May 2009, but still rose in value by about 4 percent.
• Exports to Vietnam rebounded nicely in May, exceeding the May 2009 volume by 43 percent and nearly doubling in value. For the year, exports to Vietnam are 6 percent higher in volume (29,122 metric tons or 64.2 million pounds) and 18 percent higher in value ($104.5 million). Other markets in the ASEAN region are also growing impressively, including the Philippines and Indonesia, which are key markets for beef variety meat.
• Taiwan’s activity slowed in May, but beef exports to Taiwan are still up 43 percent in volume (14,139 metric tons or 31.2 million pounds) and 52 percent in value ($72.9 million) over January through May 2009.
• The Middle East continues to show excellent growth for beef muscle cuts, while remaining a key region for variety meat exports as well. Egypt leads the way in both categories, with total beef exports to Egypt rising 20 percent in volume and 42 percent in value over last year. Region-wide, exports to the Middle East are up 25 percent in volume (45,028 metric tons or 99.3 million pounds) and 45 percent in value (to $78.6 million).

Exports to the Caribbean are up about 30 percent in both volume and value over last year, with Jamaica, the Dominican Republic and Bahamas ranking as the top three individual markets. The Netherlands Antilles has emerged as a growth market for muscle cuts, while Trinidad and Tobago is now second only to Jamaica in variety meat purchases.

Duty-free status is providing a boost for U.S. beef in the European Union, as USDA data show growth of 46 percent in volume and 69 percent in value over the first five months of last year. EU import data, however, is considered a more reliable measurement of export activity to this unique market, showing growth in the range of 60 percent, with the U.S. now accounting for 9 percent of the EU’s chilled beef imports (up from 5 percent last year).

“The rebound in beef demand in Asia and in other key regions has provided a much-needed boost to the U.S. beef industry,” Seng said. “While we are still working to rebuild demand in Mexico, the growth in our other key markets is steady and we expect this momentum to continue in the second half of the year.”

Lamb exports still up in volume, with value pulling ahead of last year’s pace

U.S. lamb export volume is 25 percent ahead of last year, with value up 1 percent. May was a strong month in both categories, as export volume exceeded May 2009 by 30 percent and export value was up 19 percent. Exports to Mexico have surged by 127 percent in volume and 160 percent in value compared to last year, while exports to the Caribbean and Canada are lower. Complete pork, beef and lamb export statistics are available online.