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LIVESTOCK MARKETS: January results show solid start for pork, beef exportsLIVESTOCK MARKETS: January results show solid start for pork, beef exports

Beef exports significantly higher than year-ago levels.

Krissa Welshans 1

March 8, 2018

7 Min Read
LIVESTOCK MARKETS: January results show solid start for pork, beef exports

January exports of U.S. beef were significantly higher than the large totals a year ago, while pork exports were steady in volume and increased in value, according to data released by the U.S. Department of Agriculture and compiled by the U.S. Meat Export Federation (USMEF).

Beef exports totaled 105,486 metric tons in January, up 9% year over year, while export value surged 21% to $624.4 million. Exports accounted for 12.4% of total beef production in January, up slightly from a year ago. For muscle cuts only, the percentage exported increased from 9.5% to 10.1%. Beef export value averaged $293.06 per head of fed slaughter, up 14% year over year.

January pork exports totaled 203,488 mt, steady with last year’s strong volume, while export value increased 7% to $545.6 million. Pork exports accounted for 24.7% of total pork production, down from 26.2% a year ago. For muscle cuts only, the percentage exported declined slightly to 21.5%. Pork export value averaged $50.93 per head slaughtered, up 1% year over year.

For muscle cuts only, beef exports reached 80,495 mt, up 15%, and were valued at $555.7 million, up 23%. Pork export volume increased 5% to 164,189 mt, while value climbed 9% to $454.2 million. Beef variety meat volume fell 5% to just under 25,000 mt, but value increased 7% to $68.8 million. Pork variety meat exports dropped 16% in volume to 39,299 mt but still managed a 2% increase in value to $91.5 million.

“January export results were solid overall and were especially strong for muscle cuts,” USMEF president and chief executive officer Dan Halstrom said. “Despite the decline in variety meat volume, export value continued to increase. This underscores the important contribution variety meats deliver for producers and for everyone in the U.S. supply chain.”

Asian markets continue to shine for U.S. beef exports

U.S. beef continued to gain momentum in the Japanese market, with January exports increasing 7% from a year ago in volume to 23,968 mt and 19% in value to $148.6 million. This included a 30% increase in chilled beef exports to 12,411 mt, with value up 38% to $92.4 million. Frozen exports declined 13% in volume to 8,141 mt but increased slightly in value to $33.1 million.

USMEF reported that frozen U.S. beef entering Japan is currently subject to a 50% safeguard tariff, but that this is scheduled to revert back to 38.5% on April 1, the beginning of Japan's new fiscal year. Australia continued to benefit from a bilateral trade agreement with Japan as frozen beef from Australia is subject to a lower duty of 27.2%. This rate will further decline to 26.9% on April 1.

Other January highlights for U.S. beef included:

  • Exports to South Korea, which reached a record $1.2 billion in 2017, increased 13% from a year ago to 17,133 mt, while export value soared 34% to $122.3 million. This included a 54% increase in chilled beef exports to 3,954 mt, with value up 63% to $36.9 million.

  • USMEF noted that through the Korea-U.S. Free Trade Agreement (KORUS), the duty on U.S. beef was reduced to 21.3% on Jan. 1, about 5% lower than Australia’s rate for this year and down significantly from the pre-KORUS rate of 40%.

  • Following large shipments in the fourth quarter of 2017, exports to Hong Kong slowed in January, but still easily exceeded last year’s totals, increasing 41% from a year ago in volume to 10,493 mt and 53% in value to $79.8 million. Exports to China, which resumed in June after a 13-year absence, hit a new monthly high of 819 mt in January and were valued at $7.5 million.

  • Exports to Taiwan also posted impressive gains in January, increasing 17% in volume to 4,207 mt. Export value increased 41% to $42 million.

  • Led by solid gains in Indonesia and Vietnam, exports to the Association of Southeast Asian Nations (ASEAN) region climbed 22% in volume to 3,108 mt and 13% in value to $15.9 million.

  • Strong results in Chile and Colombia fueled beef exports to South America, which increased 90% in volume to 3,307 mt and 65% in value to $13.9 million.

  • Exports to Central America jumped 40% in volume to 1,082 mt and 32% in value to $5.9 million, led by a strong performance in Guatemala and larger variety meat shipments to El Salvador.

  • Beef exports to Africa comprised mostly variety meat in 2017, but January produced a large increase in muscle cut exports to Angola and South Africa. As a result, total exports to Africa were up 19% in volume to 954 mt and surged 88% in value to $1.4 million.

Pork to Mexico steady

Building on a record 2017 performance, January pork exports to Mexico increased 1% from a year ago in volume to 72,997 mt and 4% in value to $133.5 million. USMEF said Mexico continues to be a mainstay market for U.S. hams and is the second-largest destination (behind China/Hong Kong) for pork variety meat.

Other January highlights for U.S. pork included:

  • Exports to leading value market Japan totaled 35,048 mt, up 11%, valued at $146.4 million, up 17%. Chilled exports were up 15% in volume to 20,212 mt and 21% in value to $96.8 million.

  • Exports to Korea, which posted impressive gains in 2017, continued to gain momentum in January as volume increased 17% to 18,879 mt and value climbed 20% to $54.2 million.

  • Led by solid gains in mainstay markets Honduras and Guatemala and exceptional growth in El Salvador, pork exports to Central America increased 18% in volume to 6,179 mt and 20% in value to $14.5 million.

  • Year-over-year increases in both Australia and New Zealand pushed export volume to the Oceania region up 10% to 7,613 mt, while export value increased 15% to $22.2 million. USMEF said pork exports to Oceania are primarily comprised of raw material for further processing, with Australia being one of the leading destinations for U.S. hams.

  • Led by strong growth to Vietnam, January export volume to the ASEAN region climbed 16% to 3,053 mt, and value was up 17% to $7.9 million. The strong performance in Vietnam helped offset reduced exports to the Philippines, the region’s leading destination for U.S. pork, USMEF said.

  • Reflecting larger domestic production in China and correspondingly lower hog and pork prices, exports to China/Hong Kong fell 16% to 31,997 mt but still achieved a 2% increase in value to $77.9 million. For muscle cuts only, exports to China/Hong Kong increased 10% in volume to 12,827 mt and 14% in value to $25.6 million versus a year ago, but exports slowed from the fourth-quarter pace when shipments gained momentum ahead of the Chinese New Year. Following two big years, USMEF said January pork variety meat exports to the region were the lowest since 2015.

Market recap

Live cattle futures were mixed this week. April contracts closed higher Monday at $123.225/cwt. but closed lower Thursday at $121.775/cwt.

April feeder cattle futures were mostly lower this week. Contracts closed higher Monday at $146.875/cwt. but fell as the week progressed, closing lower Thursday at $143.00/cwt.

The Choice and Select beef cutout closed higher at $223.88/cwt. and $216.78/cwt., respectively.

April lean hog futures were mixed, closing higher Monday at $68.80/cwt. and Thursday at $68.075/cwt.

Pork cutout values continued to fall this week. The wholesale pork cutout closed lower at $72.99/cwt. Loins and hams were lower at $72.80/cwt. and $58.37/cwt., respectively. Bellies fell sharply to $100.35/cwt., down from $120.76/cwt. the prior week.

Hogs delivered to the western Corn Belt were slightly higher, closing Thursday at $62.56/cwt.

The U.S. Department of Agriculture reported the Eastern Region whole broiler/fryer weighted average price on March 2 at 90.29 cents/lb.

According to USDA, egg prices were steady, with a steady to higher undertone. Offerings and supplies were light to moderate, while demand was moderate to good.

Large eggs delivered to the Northeast were higher at $1.74-1.78/doz. Prices in the Southeast and Midwest also were higher at $1.86-1.89/doz. and $1.67-1.70/doz., respectively. Large eggs delivered to California were higher at $2.43/doz.

For turkeys, USDA said the market was steady, with a steady to firm undertones. Offerings and demand have been light to moderate. Prices for hens and toms were unchanged at 75-84 cents/lb.

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