Red meat muscle cut exports strong in August

Variety meat exports lower than a year ago due partly to lack of available labor required to harvest and export some items.

October 8, 2020

10 Min Read

August exports of U.S. beef and pork muscle cuts were above last year’s strong volumes, according to data released by the U.S. Department of Agriculture and compiled by the U.S. Meat Export Federation (USMEF). Variety meat exports were lower than a year ago due partly to the lack of available labor required to harvest and export some items.

Led by record-large demand in South Korea and Taiwan, beef muscle cut exports were the largest in more than a year at 89,148 metric tons, up 3.5% year over year, while export value increased slightly from a year ago to $611 million. USMEF reported that combined beef/beef variety meat exports were 109,752 mt in August, down 4.5% from a year ago. Export value was $673.8 million, down 2% from a year ago but the highest since March.

For January through August, beef muscle cut exports were 6% below last year’s pace in volume at 627,248 mt and 9% lower in value at $4.38 billion. Beef/beef variety meat exports were down 8% to 808,659 mt, with value down 9% to $4.95 billion.

Beef export value per head of fed slaughter averaged $302.82 in August, up 1% from a year ago. The January to August average was down 4% to $297.96. August exports accounted for 13.7% of total beef production and 11.9% for muscle cuts, compared to 14% and 11.3%, respectively, last year. The January through August ratios were 13.3% and 11.1%, down from 14.2% and 11.6% a year ago.

According to USMEF, August exports of U.S. pork muscle cuts were 180,369 mt, up 1% from a year ago, although value was down 11% to $448.7 million. Combined pork/pork variety meat exports were down 2% in volume to 217,893 mt and down 10% in value to $528 million, but pork exports remain on a record pace in 2020, with January to August muscle cut exports up 22% from a year ago to 1.68 million mt, with value up 20% to $4.45 billion. Pork/pork variety meat exports were up 17% in volume to just under 2 million mt, with value up 18% to $5.13 billion.

Pork export value per head slaughtered averaged $47.47 in August, down 12% from a year ago, but the January to August average was still up 15% to $59.59. August exports accounted for 25.9% of total pork production and 23.1% for muscle cuts, down from 27.2% and 23.7%, respectively, last year. January through August ratios remained well above year-ago levels at 30% and 27.3%, compared to 26.4% and 23% in 2019.

“The upward trend in muscle cut exports is very encouraging and especially critical as beef and pork production continue to rebound from the interruptions earlier in the year,” USMEF president and chief executive officer Dan Halstrom said. “Maintaining variety meat volumes has been especially challenging this year, but we continue to expand and develop destinations for these items, which are essential to maximizing carcass value.”

Halstrom said COVID-19 continues to affect many countries, but the recovery in the foodservice sector is well underway in China and Taiwan, and there is progress in other main markets, including Japan and Korea. Even as foodservice activity increases, strong retail and online sales persist.

“Record beef shipments to Korea, Taiwan and China show the kind of rebound U.S. beef can achieve as the foodservice sector gradually recovers and adapts, and we are excited to see demand strengthen further entering the fourth quarter,” he said. “Pork demand is also recovering in some of the regions hardest hit by COVID-19 restrictions, and we see continued export growth in countries where domestic production has been impacted by African swine fever (ASF). U.S. pork is also making significant gains in Japan, including dramatic growth in ground seasoned pork and strong demand for chilled U.S. pork cuts in the regional retail sector.”

Record beef exports led by Korea, Taiwan

USMEF said South Korea was the pacesetter for U.S. beef exports in August, setting new records for volume -- at 27,149 mt, up 22% from a year ago -- and value, up 16% to $183.1 million. For January through August, exports to Korea were still down 3% in volume to 168,262 mt and 6% in value to $1.18 billion from last year’s record pace due in large part to COVID-19-related effects on the U.S. supply chain as well as restrictions on Korea’s foodservice operations. Korea gradually eased restrictions this summer but recently re-imposed some social distancing measures, including limits on gatherings and banquets, which have had a negative impact on demand for loin cuts.

Beef exports to Taiwan continued to rebound in August, reaching a record 7,439 mt, up 20% from a year ago, with value up 8% to $63.8 million. These results, USMEF noted, pulled January to August exports within 1% of last year’s record pace at 42,529 mt. While export value was down 5% to $364.2 million, a strong finish in 2020 could still push exports to Taiwan to an eighth consecutive value record.

August beef exports to Japan were 26,150 mt, down 9% from a year ago, and value was down 6% to $155 million. Through August, exports to Japan were down 4% in volume to 209,570 mt and 2% in value to $1.37 billion. This was due mainly to a sharp decline in variety meat exports, although variety meat volumes have rebounded from the lows posted in May and June following U.S. supply chain disruptions. For muscle cuts only, January through August exports to Japan increased 4% from a year ago to 180,592 mt, and value was down 2% to $1.08 billion; beef short plate exports accounted for much of the volume growth.

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

  • Beef exports to China set another new record in August at 3,886 mt, with value at $28.3 million, more than quadrupling last year’s totals. January to August exports to China were 13,148 mt, up 134% from a year ago, with value up 118% to $97.3 million, already exceeding full-year totals from 2019. Exports to the China/Hong Kong region increased 7% to 64,644 mt, with value up 1% to $518.3 million.

  • Following a down year in 2019, beef exports to Canada continued to gain momentum, reaching 74,387 mt, up 13% from a year ago, with value at $505.7 million, up 14%.

  • Exports to Africa, a growing destination for beef livers and other variety meats, rebounded in August, rising 18% to 1,733 mt versus a year ago. Through August, exports to Africa increased 56% in volume to 18,729 mt and 35% in value to $15.8 million, led by growth in South Africa, Cote d’Ivoire, Gabon, Angola and Ethiopia.

  • Exports to Indonesia were 2,644 mt in August, up 24% from a year ago, with muscle cut exports setting a new record at 1,837 mt, up 99%. Exports through August totaled 14,208 mt, down 8% from last year’s record pace, with value at $50.1 million, down 1%.

  • Foodservice restrictions and a steep decline in tourism continue to weigh heavily on beef exports to Mexico, although July and August volumes were up sharply from the May low. Through August, shipments to Mexico were down 28% from a year ago to 112,598 mt, with value down 32% to $493.8 million. Mexico is still the largest volume destination for U.S. beef variety meats, even though shipments through August were down 9% from a year ago in volume to 56,611 mt and down 16% in value to $139.4 million.

Pork demand rebounding in key markets

USMEF relayed that pork exports to Japan, traditionally the leading value market for U.S. pork, reached 30,247 mt in August, up 7% from a year ago and the largest since April. August export value was $123.5 million, up 3%. For January through August, exports to Japan edged 1% above last year’s pace to 253,362 mt, with value at $1.07 billion, up 4%. Japan’s imports of U.S. ground seasoned pork have rebounded strongly -- with value up 48% to $220 million -- in reaction to lower tariffs and an increase in Japanese demand for sausages.

August exports to China/Hong Kong fell below the year-ago volume for the first time this year, dropping 3% to 61,947 mt, with value down 8% to $126.2 million. USMEF said August results do not reflect China’s suspension of pork imports from Germany, which was announced Sept. 12 following findings of ASF in wild boars near the Germany-Poland border. Through August, exports to China/Hong Kong still more than doubled last year’s totals in both volume -- up 107% to 737,956 mt -- and value, up 136% to $1.7 billion.

Although August pork exports to Mexico remained below year-ago levels, Mexico reclaimed its position as the top destination for U.S. pork muscle cuts, at 46,462 mt. For January through August, pork/pork variety meat exports to Mexico were 8% below last year’s pace at 435,553 mt, with value down 15% to $701.9 million. Mexico’s demand is critical to the U.S. industry, especially for bone-in hams, of which total exports were a record-large 61,812 mt in July and up 29% in August to 54,878 mt versus last year. Mexico took nearly 70% of the July and August volume, but exports also increased to China, Canada, the Philippines, Vietnam, Honduras and the Dominican Republic.

Other highlights for U.S. pork included:

  • Fueled by surging demand in Vietnam and a recent rebound in the Philippines, exports to the Association of Southeast Asian Nations region climbed 36% from a year ago to 47,666 mt, valued at $113.6 million. Exports to Vietnam were record large for the second consecutive month in August, and January to August shipments more than tripled last year’s pace at 16,323 mt, up 228%, with value at $35 million, up 278%. Following a slow start to the year, exports to the Philippines moved 4% ahead of last year in volume to 27,314 mt and 11% higher in value to $66.5 million.

  • Colombia’s demand for U.S. pork continued to recover in August, reaching 5,018 mt – down 13% from a year ago but the largest since March. Following severe economic headwinds earlier this year from COVID-19 restrictions and devaluation of the Colombian peso, January through August exports to Colombia trailed last year’s pace by 38% in both volume at 41,117 mt and value at $89.4 million.

  • Strong growth in Honduras and increasing demand in Nicaragua kept pork exports to Central America just below last year’s record pace at 59,979 mt, down 1%. Export value was $145.4 million, also down 1%.

Market recap

December live cattle futures started the week higher but couldn’t sustain the gains. Contracts closed higher Monday at $111.75/cwt. and Wednesday at $113.10/cwt. but then closed lower Thursday at $112.625/cwt.

November feeder cattle futures were mixed but mostly lower. Contracts closed higher Monday at $139.925/cwt. but lower Thursday at $136.45/cwt.

The Choice and Select cutouts closed lower at $216.00/cwt. and $203.10/cwt., respectively.

December lean hog futures rallied this week, with contracts closing higher Monday at $62.65/cwt. and Thursday at $66.85/cwt.

The pork cutout continued to strengthen this week. The wholesale pork cutout closed higher at $95.36/cwt. Loins closed higher at $89.03/cwt., while hams were lower at $73.34/cwt. Bellies were $160.98/cwt., up from $153.76/cwt. last week.

Hogs delivered to the western Corn Belt were higher on the week, closing at $64.75/cwt., but prices were nearly unchanged from last week.

USDA reported the Eastern Region whole broiler/fryer weighted average price at 61.25 cents/lb. on Oct. 4.

According to USDA, egg prices were unchanged, with a generally firm undertone. Supplies were moderate to light at times, and offerings were light to moderate. Demand was moderate to good.

Large eggs delivered to the Northeast were higher at $1.03-1.07/doz. Prices in the Southeast and Midwest were also higher at $1.07-1.10/doz. and 95-98 cents/doz., respectively. Large eggs delivered to California were $1.62/doz.

For turkeys, USDA said the market was steady to firm, and demand was moderate to good. The price range for hens was $1.13-1.19/lb., and the price range for toms was $1.13-1.18/lb.

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