U.S. pork exports were record large in July, while beef exports were relatively steady with last year's strong results, according to data released by the U.S. Department of Agriculture and compiled by the U.S. Meat Export Federation (USMEF).
July pork exports surged to 233,242 metric tons, up 32% year over year and topping the previous record from April 2018. Export value was $623.3 million, up 34% and breaking the previous high reached in November 2017. These results pushed January through July exports 2% ahead of last year's pace to 1.48 million mt, while value was down 2% to $3.77 billion.
According to USMEF, pork export value averaged $58.92 per head slaughtered in July, up 22% from a year ago and the highest in five years. January to July export value averaged $51.33 per head, down 5% from the same period last year. July exports accounted for 29.3% of total U.S. pork production -- up from 24.7% a year ago and the highest since April 2018 -- and 25.9% for muscle cuts only -- up from 21.7% and the highest ratio in five years. For January through July, exports accounted for 26.3% of total pork production and 22.9% for muscle cuts -- down from 27% and 23.3%, respectively, a year ago.
Beef exports in July increased 1% year over year to 117,842 mt. Export value was $720.4 million, down slightly from a year ago but still the seventh-highest monthly total on record. January to July beef exports were down 2% from a year ago in volume to 766,607 mt, while export value was slightly below last year's record pace at $4.75 billion.
USMEF reported that beef export value per head of fed slaughter averaged $308.47 in July, down 7% from a year ago, while January to July export value averaged $311.51 per head, down 2%. July exports accounted for 14.4% of total U.S. beef production and 11.8% for muscle cuts only, down from 15.1% and 12.9%, respectively, last year. For the first seven months of the year, exports accounted for 14.1% of total beef production and 11.6% for muscle cuts -- each down a half-percentage point from a year ago.
Momentum builds for pork in Mexico, China
Since Mexico lifted its 20% retaliatory duty on U.S. pork in late May, exports have rebounded significantly, USMEF reported. In July, exports to Mexico reached 67,161 mt, up 19% from a year ago, while value surged 38% to $126.7 million. January to July results still trail last year by 12% in volume at 411,944 mt and 14% in value at $700.7 million, but exports to Mexico are well positioned for a strong second half of 2019.
"USMEF anticipated a rebound in Mexico once duty-free status was restored for U.S. pork, but I want to emphasize that we did not take this recovery for granted," USMEF president and chief executive officer Dan Halstrom said. "While those retaliatory duties were in place, USMEF ramped up our outreach with processors and other major buyers in Mexico and worked closely with them to keep product moving south, and with the duties removed, we're seeing the results of these efforts. Now, ratification of the U.S.-Mexico-Canada Agreement is critical to ensure long-term duty-free access to this key market."
Although held back by China's retaliatory duties on U.S. pork, exports to China/Hong Kong contributed mightily to the July volume and value records, USMEF noted. Exports to the region were a record 68,657 mt in July, more than triple year-ago levels, while value climbed 173% to a record $152.5 million. For January through July, exports to China/Hong Kong were up 23% in volume to 292,666 mt and rose 3% in value to $580.3 million.
“China's hog prices soared to record levels in August, and retail pork and poultry prices are also trending sharply higher as China's African swine fever-related hog shortage intensifies,” USMEF said.
In leading value market Japan, where no new duties have been imposed but U.S. pork faces higher tariff rates than its competitors, July exports were steady with last year at 31,019 mt, while value was up 5% to $133.2 million. Through July, exports to Japan were down 3% in volume to 222,300 mt and dropped 4% in value to $906.7 million. USMEF pointed out that the White House recently announced an agreement in principle with Japan that is expected to bring tariffs on U.S. pork and beef in line with competitors' rates, but the agreement still must be finalized, and the timeline for implementation is not yet known.
Other January through July highlights for U.S. pork include:
- Exports to South America -- led by strong results in mainstay market Colombia and exceptional growth in Chile and Peru -- climbed 30% above last year's record pace in volume to 95,152 mt and were 32% higher in value at $237.3 million.
- Australia and New Zealand continued to shine as important destinations for hams and other pork muscle cuts used for further processing. Exports to Oceania were on a record pace as volume increased 41% from a year ago to 69,978 mt, and value was up 32% to $192.5 million.
- Despite facing higher tariffs since April due to a safeguard threshold, pork exports to Panama increased 41% from a year ago to 8,245 mt, while value was up 33% to $20.5 million. This helped push exports to Central America 15% above last year's record pace in volume, at 52,820 mt, and 17% higher in value at $127.5 million. In addition to Panama, exports trended higher year over year to Costa Rica, Guatemala, Nicaragua and Honduras.
- Exports to Canada remained above year-ago levels in July, even after Canadian pork lost access to its top export destination — China — in late June. Through July, exports to Canada were up 11% from a year ago to 124,017, while value increased 8% to $454.1 million.
Another record month for U.S. beef in Korea
According to USMEF, South Korea continues to be the growth pacesetter for U.S. beef exports, as July volume reached 25,104 mt, up 6% from a year ago. This included 24,192 mt of beef muscle cuts, also up 6% and setting a new monthly volume record. Export value was $181.3 million, up 7% from a year ago and breaking the record set the previous month. For January through July, beef exports to Korea climbed 11% in volume to 151,983 mt, while the export value of $1.1 billion exceeded last year's record pace by 14%.
"The Korean market is a remarkable success story and a blueprint for what U.S. beef can achieve when consumers are not shouldering such a heavy tariff burden," Halstrom said. "With the duty rate now less than half of its [pre-free trade agreement] level, U.S. beef is enjoyed by more Korean consumers than ever, and in a wider variety of venues. This will also happen in Japan when duty rates come down, but on an even larger scale."
Although Korea is gaining, Japan remains the largest volume and value destination for U.S. beef. July exports slipped 2% from a year ago to 31,213 mt, with value down 4% to $188.4 million. Through the first seven months of the year, exports to Japan were 1% below last years' pace in both volume, at 189,052 mt, and value, at $1.2 billion. Strong variety meat exports (especially tongues and skirts) have helped offset a slowdown in U.S. chilled beef exports to Japan. Through July, variety meat volume was up 30% from a year ago to 38,249 mt, with value up 21% to $228.8 million. Although U.S. beef pays higher tariffs than competitors for variety meat, USMEF said the rate for U.S. tongues and skirts is 12.8%, whereas the tariff on U.S. muscle cuts is 38.5%. Competitors pay 5.7% and 26.6%, respectively.
Other January through July highlights for U.S. beef include:
- Mexico is the third-largest market for U.S. beef exports and the largest destination for U.S. beef variety meat. Even though export volume was modestly lower through July -- down 2% to 135,337 mt -- value increased 6% to $635 million. This included 52,389 mt of beef variety meat, dropping 8% from a year ago, but U.S. variety meat items are commanding better prices, as export value increased 6% to $138.2 million. Tripe export value, for example, increased 25% to $57.3 million despite a 3% decline in volume to 21,696 mt.
- Exports to Taiwan were 13% above last year's record pace in volume, at 36,601 mt, and rose 9% in value to $324.6 million. The U.S. dominates Taiwan's chilled beef imports, with a 72% market share.
- Indonesia is the leading destination for U.S. beef in the Association of Southeast Asian Nations region in 2019, with exports climbing 55% to 12,071 mt and value up 23% to $43.9 million. With solid growth in the Philippines and steady volumes to Vietnam, exports to the region increased 24% to 31,725 mt, value rose 9% to $154.8 million.
- Exports to the Dominican Republic are on a record pace, increasing 49% from a year ago to 5,305 mt, while value was up 37% to $42.7 million.
- Despite a 37% tariff (which increased to 47% on Sept. 1), July beef exports to China of 903 mt were the largest since the market reopened in 2017. Through July, exports were up 15% from a year ago in volume to 4,749 mt and rose 4% in value to $37.8 million, although the U.S. still accounts for less than 1% of China's booming beef imports.