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Beef exports stay red hot; pork exports lower

Beef exports to Japan largest in four years.

U.S. beef exports remained well above last year’s pace in July, posting one of the highest monthly export value totals on record, according to statistics released by the U.S. Department of Agriculture and compiled by the U.S. Meat Export Federation (USMEF). July pork export volume dipped below its year-ago level for the first time in 15 months, with export value also down slightly.

July beef exports totaled 104,488 metric tons (mt), up 5% year over year, while export value reached $623.7 million, up 18% from a year ago and the highest since December 2014. For January through July, exports increased 11% in volume to 711,364 mt and 15% in value to $3.97 billion compared to the first seven months of last year.

Exports accounted for 13.2% of total U.S. beef production in July and 10.7% for muscle cuts only. USMEF said these were the highest ratios of 2017 but still were down from 14.2% and 11%, respectively, last July. For January through July, beef exports accounted for 12.8% of total production and 10% for muscle cuts – roughly steady with last year. Export value per head of fed slaughter averaged $299.21 in July, up more than $35, or 13%, from a year ago. Through July, per-head export value was up 9% to $273.52.

Pork exports totaled 173,675 mt in July, down 4% year over year, and were valued at $488.9 million, down 0.6%. January-to-July volume was still up 11% from a year ago to 1.43 million mt, while export value was up 13% to $3.7 billion.

Exports in July accounted for 26% of total pork production, down from 27.5% a year ago, and 21% for muscle cuts only, down from 23%. For the first seven months of the year, with U.S. production at a record pace, the percentage of total production exported increased from 25.6% to 27.5%, while the increase was from 21.6% to 23% for muscle cuts only. Export value per head slaughtered in July was $54.22 – up slightly from June but 3% below last July. The January through July per-head average increased 10% from a year ago to $54.11.

“July was certainly a solid month, especially for beef exports, but these results remind us that the U.S. red meat industry operates in an intensely competitive global environment,” USMEF chief executive officer Philip Seng said. “At a time when some of our most essential trade agreements are under review, we must be mindful of how these agreements have helped make U.S. beef, pork and lamb more readily available and more affordable for millions of global customers, to the benefit of U.S. producers and everyone in the U.S. supply chain.”

Beef volume to Japan largest in four years

According to USMEF, beef exports to leading market Japan totaled 27,689 mt in July, up 20% from a year ago and the largest since July 2013, which was shortly after Japan increased the age of U.S. cattle eligible for import to 30 months. July export value to Japan increased 36% to $175.7 million, the highest monthly total since 1996. For January through July, exports to Japan were up 23% in volume to 178,501 mt and 29% in value to $1.08 billion.

USMEF reported that chilled beef featuring in Japan continues to pay dividends, as chilled exports were up 39% to 83,951 mt, while value was up 40% to $613 million. Driven by strong growth in Japan’s foodservice industry, especially the gyudon beef bowl chains that heavily rely on U.S. short plate, U.S. frozen beef exports to Japan were up 12% to 64,928 mt, while value was up 18% to $250 million. However, in late July, Japan’s frozen beef safeguard was triggered, which increases the duty on frozen beef imports from 38.5% to 50% for suppliers without a trade agreement with Japan, including the U.S.

“The impact of the safeguard is not likely to surface until the September export data are available, but since August, U.S. frozen beef has been at an even larger tariff disadvantage compared to Australian beef, which is subject to a duty rate of 27.2% under the Japan-Australia Economic Partnership Agreement,” USMEF explained.

Beef exports to South Korea dipped below the large volume of last July to 15,587 mt, down 5%, but were still the largest of 2017. July export value to Korea increased 8% from a year ago to $101.7 million. Through July, exports to Korea increased 9% in volume to 98,944 mt and 19% in value to $629.4 million, including an impressive 83% increase in chilled beef exports to 22,432 mt, with a value of $199 million, up 88%. USMEF said the U.S. is now the largest supplier of beef to both Japan and Korea on a value basis, with the U.S. share of Korea’s imports increasing from 43% to 48.5%.

According to USMEF, other January-to-July highlights for U.S. beef exports included:

  • After a slow start in 2017, beef exports to Hong Kong continued to rebound. Exports were up 13% year over year in volume to 65,379 mt and 21% higher in value to $417.8 million. July was the first full month for exports to China, which totaled 137 mt and were valued at $1.3 million.
  • Beef exports to Taiwan increased 16% from a year ago in volume to 24,234 mt and rose 24% in value to $215.5 million, including chilled beef exports of 9,883 mt, up 19%, valued at $114 million, up 22%. U.S. beef holds more than 70% of Taiwan’s chilled beef market, the highest share of any Asian destination.
  • Led by strong growth in Chile, Peru and Colombia, beef exports to South America increased 20% year over year in volume to 16,159 mt and rose 21% in value to $63.2 million. Exports to Brazil, which launched in late April, reached 1,198 mt and were valued at $3.2 million.
  • A strong performance in the Philippines, Indonesia and Vietnam fueled 79% year-over-year growth in export volume to the Association of Southeast Asian Nations (ASEAN) region to 23,376 mt, with value up 59% to $114.1 million. This region is especially strong for beef variety meat exports, as volume reached 7,145 mt, up 176%, valued at $12.5 million, up 164%.
  • Within North America, beef exports were fairly steady with last year. Mexico continues to be the second-largest volume destination for U.S. beef exports, while Canada ranks fourth. Exports to Mexico increased 2% in volume to 134,543 mt but slipped 2% in value to $544.8. Exports to Canada were up 1% in volume to 68,097 mt and 4% in value to $475.7 million.

Pork slips despite strong growth in some regions

USMEF reported that pork exports to Mexico remained on pace to set a sixth consecutive annual volume record, with July volume up 7% from a year ago to 58,625 mt and value increasing 9% to $122.9 million. Through July, exports increased 20% in volume to 457,190 mt and 26% in value to $854.4 million.

“Both the U.S. and domestic pork industries continue to reap the benefits of Mexico’s rapidly growing per capita pork consumption, which has increased by about one-third over the past 10 years to 18 kg annually (based on USDA estimates),” USMEF noted.

Leading pork value market Japan saw a year-over-year decline in July, as exports dipped 7% both in volume to 28,314 mt and in value to $120.5 million. Through July, exports to Japan remained modestly higher year over year in both volume, up 2% to 228,489 mt, and value, up 6% to $931.1 million. This included chilled pork exports of 122,755 mt, down 3%, valued at $577 million, up 3%, as Canada continues to compete strongly for Japan’s high-value chilled pork market.

USMEF said other January-to-July highlights for U.S. pork exports included:

  • In South Korea, pork exports continued to capitalize on strong growth in red meat consumption, especially for convenience products and home meal replacement items. Exports to Korea climbed 30% in volume to 103,142 mt and 36% in value to $282.6 million.
  • Led by strong growth in Colombia and Chile, pork exports to South America more than doubled year over year in both volume, up 104% to 56,345 mt, and value, up 109% to $143.6 million. The White House recently announced that Argentina will soon open its market to U.S. pork, adding further opportunities in this growing region.
  • Led by Honduras, exports to Central America are on a record pace and reached 38,720 mt, up 6% from a year ago, valued at $92.4 million, up 8%. This also is shaping up to be a record year for pork exports to the Dominican Republic, which rose 42% to 21,278 mt, with value up 49% to $47.8 million.
  • Strong growth in the Philippines fueled a 24% increase in pork exports to the ASEAN region to 26,710 mt, with value up 34% to $68.8 million. Exports also increased to Singapore and were steady to Vietnam.
  • In the China/Hong Kong region, July exports dropped significantly from a year ago to 32,167 mt, down 33%, valued at $68.8 million, down 27%. July variety meat exports were the smallest in 18 months at 22,960 mt, down 10%. As China’s domestic pork production continues to rebound in 2017, January-to-July exports to the region were 8% below last year’s pace in volume, at 306,404 mt, but slipped just 1% in value to $627.1 million.
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