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U.S. products commanding solid prices and winning back market share.
May 8, 2017
6 Min Read
U.S. pork and beef exports capped a strong first quarter with excellent March results that included a new record volume for pork, according to statistics released by the U.S. Department of Agriculture and compiled by the U.S. Meat Export Federation (USMEF).
Pork exports reached 227,955 metric tons (mt) in March, up 16% year over year and topping the previous monthly high set in November 2016. Export value was $586.6 million, up 22%. For the first quarter, pork exports were up 17% in volume to 627,647 mt and 22% in value to $1.58 billion.
March exports accounted for 28% of total pork production and 23.3% for muscle cuts only, up from 25.4% and 22%, respectively, a year ago; first-quarter ratios were also significantly higher, at 27.2% and 22.6%, compared to 23.9% and 20% in 2016. Export value per hog slaughtered averaged $54.93 in March, up 15% year over year, while the first-quarter average increased 18% on the year to $52.42.
Beef exports totaled 105,310 mt in March, up 18% year over year, with value increasing 22% to $588.2 million. First-quarter beef exports were up 15% in volume to 292,215 mt and 19% in value to $1.61 billion.
USMEF reported that March exports accounted for 12.5% of total beef production and just under 10% for muscle cuts only, each up slightly from last year. For the first quarter, the percentage of total beef production exported was down slightly from a year ago — 12.4% versus 12.5% — despite an increase for muscle cuts of 9.8% versus 9.4%. Export value per head of fed slaughter averaged $270.14 in March, up 11% from a year ago, while the first-quarter average increased 10% to $267.71 per head.
“Entering 2017 with record-large pork production and an uptick in beef slaughter, we knew this 'wall of U.S. meat' presented a challenge for our industry,” USMEF president and chief executive officer Philip Seng said. “So, the fact that first-quarter export volumes are higher than a year ago is not surprising, but it's important to look beyond that — to the higher percentage of production being exported and the strong return on those exports.
"The U.S. is not just moving more meat internationally because we have more available; our products are commanding solid prices and winning back market share in many key destinations, even with a strong U.S. dollar and many trade barriers still in place, but our competitors are working every day to reverse this trend, so we must aggressively expand and defend our international customer base,” Seng added.
Mexico, Korea and South America fuel record pork volume
According to USMEF, the red-hot pace for U.S. pork exports to Mexico continued in March, with volume up 34% year over year to 68,866 mt and value increasing 47% to $127.2 million. For the first quarter, exports to Mexico totaled 206,262 mt, up 29%, with the value at $371.9 million, up 42%.
USMEF said strong demand from Mexico is especially important for U.S. ham prices, but exports of pork variety meat to Mexico also posted a strong first quarter, increasing 14% in volume to 37,596 mt and 38% in value to $58.1 million.
In Japan, the leading value market, March exports increased a modest 2% in volume to 37,806 mt but climbed 12% in value to $155.2 million — the highest since October 2014. In the first quarter, export volume to Japan was up 7% in volume to 101,581 mt and up 13% in value to $411.3 million. Chilled pork exports to Japan increased 3% to 56,307 mt, while value increased 10% to $260 million.
Other first-quarter highlights (compared to year-ago levels) for U.S. pork included:
Strong variety meat demand in China/Hong Kong helped drive exports to the region 5% higher in volume to 131,036 mt and 11% higher in value to $258.8 million. While muscle cut exports slowed, variety meat volume climbed 24% to 86,097 mt, while value was up 29% to $176.2 million — making an important contribution to per-head value.
Since posting a slow start in 2016, pork exports to South Korea have steadily regained momentum, as exports totaled 51,158 mt, up 31%, with the value at $137 million, up 39%. “Most U.S. pork now enters Korea duty free under the Korea-U.S. Free Trade Agreement, which has helped boost volumes of raw material for further processing as well as processed pork products,” USMEF said.
Another major market rebounding from last year's slow start is Colombia, USMEF said, where U.S. pork also benefits from lower tariffs secured in a recent free trade agreement. First-quarter exports to Colombia doubled from a year ago in both volume (16,532 mt) and value ($36.5 million). Also bolstered by a near-doubling of exports to Chile and Peru, first-quarter pork exports to South America were up 95% in volume to 23,838 mt and 94% in value to $57 million.
In Australia, an important market for U.S. hams and other cuts utilized in further processing, exports increased 38% in volume to 20,607 mt, while export value climbed 43% to $57.7 million.
Beef exports move higher in Asian, North America
March beef exports to Japan increased 41% in volume to 28,135 mt and 39% in value to $167.7 million. USMEF said this capped a very strong first quarter in which exports jumped 41% in volume to 74,411 mt and 42% in value to $427.3 million. This included a 55% increase in chilled beef volume to 33,366 mt as U.S. beef captured its highest-ever market share in Japan's high-value chilled sector.
Coming off a record performance in 2016, beef exports to South Korea posted a very strong first quarter, with volume up 23% to 42,551 mt and value increasing 30% to $267.5 million. With U.S. beef continuing to gain momentum in Korea's retail and restaurant sectors, first-quarter chilled beef exports were up 78% to 8,508 mt.
Other first-quarter highlights (compared to year-ago levels) for U.S. beef included:
Exports to Mexico posted a solid increase in volume to 57,057 mt, up 17%, while value increased 3% to $226.8 million. As an important destination for shoulder clods, rounds and other beef end cuts, muscle cut exports to Mexico expanded at an even faster pace, climbing 23% in volume to 30,015 mt and 11% in value to $175.1 million.
Despite a recent slump in the value of the Canadian dollar, beef exports to Canada have rebounded in 2017, with solid increases in both volume — up 14% to 29,909 mt — and value — up 19% to $190.5 million.
In Taiwan, where U.S. beef captures more than two-thirds of the chilled beef market, exports increased 28% in volume to 9,746 mt and 29% in value to $85.7 million. This included a 10% increase in chilled beef volume to 3,650 mt.
Beef exports to South America were down 2% in volume to 4,919 mt but increased 16% in value to $23 million, bolstered by a strong performance in Colombia and a recent rebound in Peru. This week, USDA also confirmed the arrival of the first U.S. beef shipments to Brazil since a suspension related to bovine spongiform encephalopathy was imposed more than 13 years ago. The first significant export volumes for Brazil will likely appear in the May USDA data, which will be available in early July.
March exports to South Africa, at 1,107 mt, were the highest since the market opened last year, making it the month's 10th-largest volume destination for U.S. beef. For the first quarter, South Africa ranked 11th at 1,971 mt. Export value was $1.5 million, with most of the volume being beef livers.
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