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Beef exports strong; pork exports set records

China’s demand for U.S. pork climbed even higher in December, more than quadrupling year-ago volume.

U.S. pork exports posted new volume and value records in 2019, reaching nearly $7 billion, according to data released by the U.S. Department of Agriculture and compiled by the U.S. Meat Export Federation (USMEF). Exports of U.S. beef were below the previous year’s record levels, while lamb export volume was the second largest on record.

According to USMEF, Pork exports soared to 282,145 metric tons in December, up 34% year over year and surpassing the previous high set in November 2019 by 9%. Export value was $760 million, up a remarkable 44% from a year ago and breaking the previous record (also from November 2019) by 7%. These results pushed 2019 exports above the previous year by 10% in volume to 2.67 million mt and 9% in value to $6.95 billion, breaking previous records for both volume (2.45 mmt in 2017) and value ($6.65 billion in 2014).

Pork export value per head slaughtered was $66.70 in December, nearly one-third higher than a year ago and the highest monthly average since 2014. For 2019, per-head value averaged $53.51, up 4% year over year. The percentage of pork production exported also set new records in December, as exports accounted for 32.1% of total pork production and 29.3% for muscle cuts only, up substantially from 26.1% and 23.6%, respectively, a year ago. USMEF said exports in 2019 accounted for 26.9% of total pork production, up from 25.7% and the highest since 2012. For muscle cuts only, the ratio was 23.6%, up from 22.5% in 2018.

On the beef export side, exports in December totaled 111,315 mt, down 1% from a year ago, with value at $682 million, down 3%. Total beef exports in 2019 were 1.32 mmt, 2.5% below the previous year’s record volume. After increasing by more than $1 billion in 2018, beef export value eased by 3% to $8.1 billion.

Beef export value per head of fed slaughter was $321.21 in December, down 9% from a year ago. The 2019 average was $309.75, down 4%. December exports accounted for 14.3% of total beef production and 11.6% for muscle cuts only, down from 15.5% and 12.6%, respectively, a year ago. USMEF said the 2019 exports accounted for 14.1% of total beef production and 11.4% for muscle cuts, down from the previous year’s record highs of 14.6% and 12.1%, respectively.

December pork demand surges in China/Hong Kong

According to USMEF, following a record performance in November, demand for U.S. pork in China/Hong Kong climbed even higher in December to 110,876 mt – more than quadruple the year-ago volume – while value was nearly six times higher at $274.9 million. For 2019, pork exports to China/Hong Kong were up 89% to 665,665 mt, with value up 71% to $1.45 billion. China/Hong Kong pork imports from all suppliers in 2019 reached a record 3.45 mmt, up 40% year over year, and accelerated into December after China’s hog prices peaked in November.

“Despite retaliatory duties and the other barriers U.S. pork faces in China, exports to the China/Hong Kong region closed 2019 with tremendous momentum,” USMEF president and chief executive officer Dan Halstrom said. “We look forward to continued success in 2020, especially if U.S.-China trade relations continue to trend in a positive direction. The coronavirus situation is certainly concerning and disruptive, but it hasn’t dampened our enthusiasm for the potential this market holds for U.S. red meat.”

USMEF reported that pork exports to Mexico also closed 2019 on a high note as December volume reached 66,181 mt, up 10% from a year ago, and export value surged 46% to $137.6 million, the highest in two years.

“Saddled by Mexico’s retaliatory duties for the first five months of the year, 2019 exports to Mexico were down 9% from a year ago in volume at 708,133 mt but recovered to finish just 2% lower in value at $1.28 billion,” USMEF noted.

December pork exports to leading value market Japan trailed the previous year by 3% in volume at 29,323 mt, but value increased 3% to $121.6 million. Full-year exports to Japan were down 6% from a year ago in both volume, at 369,891 mt, and value, at $1.52 billion. Much of this decline, USMEF said, was seasoned ground pork, which fell by $86 million due to a wide tariff rate disadvantage compared to European and Canadian product. Beginning Jan. 1, Japan’s tariff rates on U.S. pork and pork products were lowered to match those imposed on major competitors, with the rate for U.S. seasoned ground pork falling from 20% to 13.3%.

Other 2019 highlights for U.S. pork exports included:

  • Led by substantial growth in Chile and Peru and an increase in shipments to mainstay market Colombia, exports to South America set new records in both volume, up 12% year over year to 152,125 mt, and value, up 16% to $382.3 million.
  • Strong growth in Panama, Guatemala, Honduras and Costa Rica drove pork exports to Central America to new record highs in volume, up 14% from a year ago to 98,182 mt, and value, up 19% to $239.5 million.
  • In Oceania, a key destination for U.S. hams and other muscle cuts used for further processing, strong demand in both Australia and New Zealand pushed exports 31% above the previous year in volume to 116,113 mt and up 34% in value to $339.2 million, setting new records.
  • Exports to Canada increased 4% from a year ago in volume to 214,703 mt (the largest since 2013) and rose 5% in value to $801.7 million (the highest since 2014).
  • Exports to South Korea slowed from the 2018 records, with volume down 14% to 207,650 mt and value falling 12% to $593 million. However, the U.S. share of Korea’s imports increased modestly to 36% as overall import volume also declined from 2018.

Korea and Taiwan set beef record

According to USMEF, the decline in U.S. beef exports from the record levels of 2018 was partially attributable to lower shipments to Japan, which were down 6% in both volume, at 311,146 mt, and value, at $1.95 billion. Similar to pork, Japan’s tariff rates for U.S. beef were lowered on Jan. 1 to match those of major competitors, with rate for U.S. beef muscle cuts dropping from 38.5% to 26.6%. Another tariff rate cut will come April 1, when Japan's fiscal year begins. December exports to Japan were slightly above year-ago levels in both volume, at 24,056 mt, and value, at $144.6 million.

“It was gratifying to see beef exports to Japan perform so well in December, given that the first tariff rate cut was pending and set to take effect Jan. 1,” Halstrom said. “Buyers in Japan have been waiting a very long time for tariff relief and have already responded enthusiastically. We look forward to solid growth in 2020 and beyond.”

USMEF relayed that South Korea made a strong push in 2019 to become the leading value market for U.S. beef, finishing a close second to Japan at a record $1.84 billion, up 5% from a year ago. Korea was also the second-largest volume market for U.S. beef at 255,758 mt, up 7% and also a new record. The U.S. captured a larger share of Korea’s chilled beef imports in 2019 at 62%, up from 58% the previous year. U.S. beef accounted for 51.5% of Korea’s total beef and beef variety meat imports and more than one-third of Korea’s total beef consumption.

“U.S. beef is achieving remarkable success in Korea’s traditional retail and foodservice sectors and is well-positioned to capitalize on growth in e-commerce, the institutional sector and other emerging sales channels,” Halstrom said. “As U.S. beef moves steadily toward duty-free status in Korea, it becomes accessible and affordable for a wider range of customers whose appetite for U.S. beef continues to grow. We are seeing many new menu concepts in this dynamic market and continued excitement about U.S. beef.”

Beef exports to Taiwan were record large for the fourth consecutive year in 2019, climbing 6% from a year ago in volume to 63,538 mt and up 3% in value to $567.1 million. USMEF said the growth is also driven by success at foodservice and retail as Taiwan continues to embrace alternative cuts and U.S. beef is underpinning overall consumption growth. The U.S. dominates Taiwan’s chilled beef market, capturing approximately 75% of its chilled imports – the highest share of any Asian destination, USMEF added.

Other 2019 highlights for U.S. beef exports included:

  • In Mexico, the third-largest market for U.S. beef behind Japan and Korea, export value increased 5% from a year ago to $1.1 billion despite a 1% decline in volume to 236,707 mt. This was largely due to strong demand for beef variety meat, especially tripe. Variety meat exports to Mexico increased 4% year over year in volume to 100,645 mt and surged 21% in value to $276.9 million. This included $111.7 million in tripe exports, up 30% from a year ago.
  • The largest decline in U.S. beef exports in 2019 was to China/Hong Kong, down 21% to 103,220 mt, with value down 19% to $830 million. Retaliatory duties and other restrictions limited U.S. exports to China, but the phase one trade agreement between the two countries includes significant breakthroughs in market access that should allow a much larger share of U.S. beef production to be eligible for China. Although China’s beef demand has recently slowed, its overall beef imports reached a staggering $8.4 billion in 2019, a 70% increase over the 2018 record.
  • Led by strong demand in Indonesia, beef exports to the Association of Southeast Asian Nations (ASEAN) region increased 23% from a year ago in volume to 60,790 mt and were 8% higher in value at $295.5 million. Exports to Indonesia reached record heights, climbing 67% from a year ago in volume to 23,591 mt and up 37% in value to $85.1 million. This included a near doubling of variety meat volume to 12,688 mt, along with substantial growth in muscle cuts.
  • Despite a slowdown in December, exports to the Dominican Republic easily surpassed the previous year’s record in both volume, up 18% to 8,034 mt, and value, up 13% to $65.8 million.
  • Fueled by outstanding demand in Panama, exports to Central America increased 3% from a year ago in volume to 15,156 mt and 7% in value to $86 million. Exports to Panama surged 33% to 2,278 mt, with value up 30% to $14.7 million.
  • Mexico was one of several markets driving strong demand for U.S. beef variety meat in 2019. Global variety meat exports increased 4% from a year ago in volume to 322,529 mt and 9% in value to $972.9 million. Exports to Japan, which largely consist of tongues and skirts, totaled 62,948 mt, up 19% from a year ago, value up 13% to $387 million. Prospects for further growth are very strong in Japan, with beef from cattle of all ages now eligible and lower tariff rates under the U.S.-Japan trade agreement (Japan’s tariff rate will phase out to zero by 2028 for U.S. tongues and by 2030 for other variety meat. Egypt, the largest destination for U.S. beef livers, saw a 3% increase in variety meat volume to 63,449 mt, while export value climbed 15% to $73.7 million. Beef variety meat exports also posted substantial year-over-year gains in Indonesia, the Dominican Republic, Chile, Angola, Gabon, Trinidad & Tobago, Mozambique and Nicaragua.

Lamb export volume largest since 2011

For 2019, lamb export volume increased 22% from a year ago to 15,732 mt, with value up 12% to $26.1 million. Led by strong demand in Mexico, export volume was the second highest on record -- behind 2011 -- and export value was the highest since 2014. December exports of U.S. lamb alone were 1,225 mt, up 9% from a year ago, while value jumped 24% to $2.36 million.

In addition to Mexico, USMEF said strong growth markets included Trinidad & Tobago, Panama, Guatemala and the Philippines.

Market recap

April live cattle futures started the week lower but recovered most of the losses as the week progressed. Contracts closed lower Monday at $118.675/cwt. and Tuesday at $117.125/cwt. but posted gains Wednesday into Thursday’s higher close of $118.525/cwt.

April feeder cattle futures were mostly higher, despite some losses on Tuesday. Contracts closed higher Monday at $137.525/cwt. and Thursday at $138.95/cwt.

For beef cutout prices, Choice closed higher at $206.45/cwt., while Select closed lower at $203.79/cwt.

April lean hog futures contracts were mostly lower, closing Monday at $65.075/cwt. and Wednesday at $63.775/cwt. before closing higher Thursday at $64.075/cwt.

The pork cutout was mixed, with the wholesale pork cutout closing lower at $63.10/cwt. Loins were higher at $66.83/cwt., while hams were lower at $53.46/cwt. Bellies saw large losses, falling from $85.20/cwt. the prior week to $70.35/cwt.

Hogs delivered to the western Corn Belt closed at $48.85/cwt. on Thursday.

The U.S. Department of Agriculture reported the Eastern Region whole broiler/fryer weighted average price on Feb. 7 at 87.44 cents/lb.

According to USDA, egg prices were steady, with a steady to lower undertone. Offerings were generally moderate, while supplies were mixed but mostly moderate to heavy. Demand was slow to moderate.

Large eggs delivered to the Northeast were higher at $1.12-1.16/doz. Prices in the Southeast and Midwest were higher at $1.16-1.19/doz. and $1.04-1.07/doz. Large eggs delivered to California were $1.90/doz.

For turkeys, USDA said the market was steady to firm, and demand was light to moderate. The price range for hens and toms was slightly higher at 93 cents to $1.01/lb.

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