June 9, 2018
April exports of U.S. pork, beef and lamb were sharply higher than a year ago in both volume and value, according to data released by the U.S. Department of Agriculture and compiled by the U.S. Meat Export Federation (USMEF). Pork exports set a new volume record, fueled by tremendous demand in Mexico, while beef exports posted the best-ever results for the month of April.
April pork export volume was 230,049 metric tons (mt), up 13% from a year ago and topping the previous high set in November 2016. April export value was $584.1 million, also up 13%. For January through April, pork export volume was 4% ahead of last year’s record pace at 866,346 mt, while value increased 9% to $2.29 billion.
For pork muscle cuts, excluding variety meat, USMEF reported that April was also a record volume month at 184,487 mt, up 18% from a year ago. Muscle cut export value was $480.6 million, up 14%.
Exports accounted for nearly 30% of total pork production in April, up from 28.4% a year ago, while the percentage of muscle cuts exported also increased significantly (25.8%, up from 23.5%). Through April, the percentageage of total production exported was fairly steady with last year at 27.4%, while muscle cuts jumped from 22.8% to 23.5%.
April pork export value averaged $58.45 per head slaughtered, up 6% from a year ago, while the January-April average increased 5% to $55.69.
Beef export volume was 111,213 mt in April, up 11% year-over-year. Export value was $676.7 million, up 23% and the fourth-highest on record. Through the first four months of 2018, exports were up 10% in volume to 429,286 mt. Export value was $2.59 billion, 20% above last year’s record pace.
Exports accounted for 14.1% of total beef production in April, up from 13.6% a year ago. For muscle cuts only, the percentage exported was 11.3%, up from 10.6%. For January through April, exports accounted for 13.4% of total production and 10.8% for muscle cuts, each up about half a percentage point from last year.
Beef export value averaged $328.46 per head of fed slaughter in April, up 16% from a year ago. Through April, per-head export value averaged $318.91, up 17%.
“Even with growth in red meat production, both pork and beef exports have accounted for a larger share and contributed more dollars per head, indicating strong international demand,” USMEF noted.
Huge month for pork to Mexico
According to USMEF, Mexico was again the pacesetter for pork exports in April, with volume reaching 79,019 mt – up 34% from a year ago and the second-largest on record. Export value to Mexico was $134.1 million, up 28%. Through the first four months of 2018, exports to Mexico were 7% above last year’s record volume pace at 282,675 mt, with value up 6% to $505.4 million.
Maintaining this pace will be challenging, however, with Mexico announcing retaliatory tariffs on imports of most U.S. pork products effective June 5. The tariff rate on chilled and frozen pork muscle cuts is 10% until July 5, when it is set to increase to 20%.
“The outstanding April performance for pork exports to Mexico really underscores the importance of this market to the U.S. industry and how it has been such a reliable trading partner for hams, picnics and other pork cuts,” said USMEF president and chief executive officer Dan Halstrom. “USMEF will continue to emphasize the quality and consistency of U.S. pork to red meat customers in Mexico and make every effort to help U.S. suppliers retain their business. But make no mistake about it, the U.S. industry is going to have to fend off competitors who suddenly have a significant tariff rate advantage and see a clear opening into the Mexican market.”
Pork exports to South Korea continued to build momentum in April, with volume (25,370 mt, up 74%) and value ($74.1 million, up 81%) increasing significantly from a year ago. Through April, exports to Korea are on a record pace, climbing 44% in volume to 94,888 mt, valued at $276.1 million (up 55%). Strong growth in consumer demand and duty-free access under the Korea-U.S. Free Trade Agreement (KORUS) have fueled a rapidly expanding presence for U.S. pork in Korea, USMEF reported.
While pork exports to the China/Hong Kong region were below year-ago levels in April, shipments remained relatively strong despite the additional 25% tariff on U.S. pork that took effect April 2. However, USMEF said it is likely that the trade impact will show up more dramatically in May export data and in coming months. The tariff increase essentially tripled China’s standard rate on frozen pork imports, taking it from 12% to 37% (the increase does not apply to Hong Kong, which still charges zero duty). April exports to China/Hong Kong were 41,567 mt, down 14% from a year ago, but slipped only slightly in value to $95.9 million. For January through April, exports to China/Hong Kong were 15 % below last year’s pace in volume (153,248 mt) but steady in value at $356.6 million.
“It is encouraging to see that pork volumes to China/Hong Kong held up fairly well in April, but the tariff disadvantage is still having a negative impact on the U.S. industry and has pressured prices for key export items,” Halstrom noted. “It’s another situation in which our competitors are capitalizing on the extra cost associated with importing U.S. pork.”
For January through April, other highlights for U.S. pork included:
Exports to leading value market Japan were 1% below last year’s pace in volume (132,534 mt) but increased 1% in value ($544.8 million). This included a 5% decrease in chilled pork volume (68,532 mt), valued at $330 million (down 1%).
Strong growth in Colombia pushed pork exports to South America up 23% from a year ago in volume (39,520 mt) and 24% in value ($96.7 million).
Led by mainstay markets Honduras and Guatemala and sharply higher shipments to Panama, exports to Central America climbed 23% from a year ago in volume (26,459 mt) and 27% in value ($63.3 million).
Pork exports achieved solid growth in the Philippines and more than doubled from a year ago to Vietnam, as exports to the ASEAN region increased 20% in volume (15,435 mt) and 31% in value ($43.8 million).
Asian markets, Mexico highlight strong April for beef
According to USMEF, Japan maintained its position as the leading volume and value market for U.S. beef, with April exports totaling 25,650 mt (up 9% from a year ago) valued at $166.6 million (up 16%). Through April, exports to Japan were steady with last year’s volume at 98,090 mt while value increased 10% to $626.1 million. This included a 4% increase in chilled beef to 47,322 mt, valued at $375 million (up 17 %).
“Frozen shipments have regained momentum now that the 50% safeguard duty rate has expired. But with a 38.5 % rate in place for both chilled and frozen beef, the U.S. remains at a large disadvantage compared to its top competitor, Australia,” USMEF noted.
U.S. beef continues to build tremendous momentum in South Korea, where April exports were up 62% from a year ago in volume (19,185 mt) and 72% in value ($134.8 million). For January through April, exports to Korea climbed 31% to 71,094 mt, valued at $501 million (up 45%). Chilled exports totaled 15,480 mt (up 29%) valued at $148 million (up 40%). In contrast to Japan, U.S. beef has a slight tariff advantage versus Australia, as KORUS was implemented earlier than the Korea-Australia Free Trade Agreement.
“The enthusiasm for U.S. beef in these markets may be at the highest level I’ve ever seen,” Halstrom said. “In nearly every segment of the retail and restaurant sectors, U.S. beef is attracting new customers with a wider range of cuts and menu items. It’s an exciting trend that’s not just limited to Japan and Korea, with U.S. beef’s popularity also strengthening in other Asian markets and in the Western Hemisphere.”
For January through April, other highlights for U.S. beef include:
In Mexico, exports were 5% ahead of last year’s pace in volume (78,435 mt) and 16% higher in value ($342.4 million). Demand was especially strong in April, as exports totaled 21,396 mt (up 22% and the largest since August), while value increased 33% to $92.1 million.
Exports to China/Hong Kong increased 23% in volume (46,043 mt) and surged 51% in value to $352.4 million. USMEF said China still accounts for a small portion of these exports, as shipments to China were 2,299 mt valued at $21.3 million. “China reopened to U.S. beef in June of last year. While U.S. beef is not yet subject to retaliatory duties in China, it remains on the proposed retaliation list with a possible additional tariff of 25%.”
Taiwan continues to display a growing appetite for U.S. beef, especially for chilled cuts, USMEF reported. Exports to Taiwan were 30% above last year’s pace in volume (17,500 mt) and 42% higher in value ($168.7 million). Chilled exports were up 43% in volume (7,605 mt) and value ($96 million), as U.S. beef captured 74% of Taiwan’s chilled beef market.
Steady growth in the Philippines and a tripling of exports to Indonesia pushed exports to the ASEAN region 35% above last year’s pace in volume (14,865 mt) and 37% higher in value ($82 million).
Exports to South America were up 14% in volume (8,971 mt) and 28% in value ($43.5 million), with the main destinations being Chile, Peru and Colombia. Leading market Chile was up 20% in volume (4,137 mt) and 14% in value ($22.5 million), though shipments slowed in March and April following a strong start to the year.
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