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Red meat export volume fairly steady, value mixed

U.S. makes efforts to expand and diversify results in impressive growth in many emerging, developing markets.

U.S. beef and pork export value posted mixed results in January, while export volume was slightly below last year’s levels, according to statistics released by U.S. Department of Agriculture and compiled by the U.S. Meat Export Federation (USMEF).

Beef exports slipped 1% year over year to 104,766 metric tons, but value still increased 3% to $642.3 million, USMEF reported. Export value per head of fed slaughter pulled back from the red-hot pace of 2018, averaging $284.86, down 3% from a year ago. January exports accounted for 12.2% of total beef production and 9.7% for muscle cuts only, down from 12.4% and 10.1%, respectively, in January 2018.

January pork exports were also down 1% from a year ago at 201,835 mt, with value dropping 9% to $494.1 million. Export value averaged $44.75 per head slaughtered, down 12% year over year. Exports accounted for 23.6% of total January pork production, down from 24.7% a year ago. The ratio was 20.3% for muscle cuts only, down from 21.5%.

According to USMEF, results for both beef and pork were bolstered by stronger variety meat volumes. Beef variety meat exports totaled 26,630 mt in January, up 7% from a year ago, valued at $81.8 million, up 19%. This was fueled by strong performances in Japan, the Association of Southeast Asian Nations (ASEAN) region and Africa, USMEF noted.

Pork variety meat exports climbed 5% year over year to 41,143 mt, led by increases in Mexico, Japan, Central and South America and Taiwan. Value, however, was still down 11% to $81 million, because exports to China -- the leading market for U.S. pork variety meat -- remain subject to China’s 50% retaliatory duties.

Japan, Korea set strong early pace

January beef exports to leading market Japan increased 8% year over year to 25,925 mt and were valued at $167 million, up 12%. Variety meat exports to Japan (mainly tongues) were especially strong, soaring by 36% in both volume, to 4,645 mt, and value, to $31.4 million. January was the first full month in which competitors of U.S. beef received tariff relief in Japan under the Comprehensive & Progressive Agreement for Trans-Pacific Partnership (CPTPP) with the import duty rate dropping from 38.5% to 27.5% on Dec. 30, 2018. This gap will widen further on April 1, when the rate for CPTPP countries drops to 26.6%.

“It’s great to see Japan’s demand for U.S. beef increase in January despite these tariff rate changes for our major competitors, but this disadvantage will become more and more pronounced over time, so negotiations toward a U.S.-Japan trade agreement cannot come soon enough,” USMEF president and chief executive officer Dan Halstrom noted. “The playing field needs to be leveled as quickly as possible so that the U.S. industry can continue to capitalize on booming meat demand in Japan.”

Following a record-shattering year, beef exports to South Korea increased 4% in January to 17,900 mt, with value up 10% to $134.3 million. USMEF pointed out that U.S. beef enjoys a tariff rate advantage under the Korea-U.S. Free Trade Agreement (KORUS), with the import duty rate declining from 40% to 18.7% since KORUS was implemented in 2012. In contrast, the rates for Australian and Canadian beef are 24% and 26.6%, respectively.

“U.S. beef is benefiting from several new trends in Korea, including mid-priced steak restaurants (also underway in Japan), inclusion of beef cuts such as chuck-eye roll and short plate in meal kits sold at retail and through e-commerce and demand for a wider range of U.S. beef cuts, such as brisket point, in Korean barbecue establishments,” USMEF said.

Other January highlights for U.S. beef include:

  • Export volume to Mexico was steady with last year at 21,194, but value climbed 14% to $101.7 million. The results for beef muscle cuts were especially strong, increasing 16% in volume to 12,532 mt and 21% in value to $78.2 million.
  • Led by Indonesia and the Philippines, exports to the ASEAN region jumped 49% from a year ago in volume to 4,644 mt and 31% in value to $20.7 million. Variety meat exports more than doubled from a year ago to 1,941 mt, up 107%, with value up 85% to $3.8 million.
  • Strong growth in Costa Rica, Guatemala and Honduras drove beef exports to Central America up 39% to 1,508 mt, while value was up 36% to $8 million.
  • Exports to Taiwan were steady with last January at 4,215 mt, but value was down 12% to $36.8 million.
  • A slow month in Hong Kong partially offset growth in other markets, as exports fell 36% in volume to 7,047 mt, while value was down 28% to $57.4 million.

Amid trade disputes, smaller markets step up

According to USMEF, retaliatory duties continued to pressure U.S. pork exports to Mexico in January, with volume down 9% from a year ago to 66,293 mt. Export value absorbed an even harsher blow, dropping 28% to $96.1 million. While the U.S. is still Mexico’s main pork supplier, Canada’s January exports to Mexico were up 26% to 11,500 mt, and European Union exports increased 91% to 305 mt. Chile’s volume was steady at 690 mt.

USMEF relayed that exports to China/Hong Kong also felt the sting of China’s retaliatory duties, dropping 16% from a year ago in volume to 26,744 mt and 32% in value to $53.2 million.

“While Japan’s import duties on U.S. pork remain unchanged, CPTPP countries received tariff relief at the end of 2018 and will see another rate decrease on April 1. This likely contributed to the January decline in U.S. pork exports to Japan, which were down 6% from a year ago in volume (32,910 mt) and 8% in value ($135.2 million),” USMEF reported.

Lower duty rates for European pork under the Japan-EU Economic Partnership Agreement were implemented Feb. 1, so the agreement’s impact was not yet reflected in Japan’s January import data, USMEF noted.

“Trade barriers in these large, mainstay markets are very unsettling for major customers of U.S. pork and are hurting the entire U.S. supply chain, so it is essential that they are addressed in a timely manner,” Halstrom explained. “On a positive note, the U.S. industry’s long-standing efforts to expand and diversify international destinations for U.S. pork have never been more important, and it is gratifying to see impressive growth in many of our emerging and developing markets.”

January highlights for U.S. pork include:

  • Pork exports to South America, led by continued record exports to Colombia and a surge in shipments to Chile, increased 57% in volume to 12,752 mt and 61% in value to $31.3 million. Exports were also higher year over year to Ecuador and Uruguay.
  • Strong growth in Panama, Costa Rica and Guatemala moved exports to Central America 18% higher year over year in volume to 7,271 mt and 15% higher in value to $16.6 million.
  • Exports to the Dominican Republic remained on a roll, increasing 29% from a year ago in both volume, at 3,289 mt, and value, at $7.2 million.
  • Growing exports to Canada, which were up 13% to 16,165 mt, indicate that the U.S. is backfilling Canada’s product needs as more Canadian pork is bound for China, Japan and Mexico. USMEF said Canadian pork production is not increasing, so Canada, therefore, needs to import more U.S. pork to meet domestic demand. This situation, the group said, will continue until retaliatory tariffs on U.S. pork exports to China and Mexico are removed and could intensify across other markets as China’s buying ramps up due to African swine fever.
  • Pork exports to both Australia and New Zealand were higher year over year in January, pushing results for Oceania up 22% in volume to 9,272 mt and up 12% in value to $24.8 million.
  • Led by excellent growth in the Philippines and Singapore, exports to the ASEAN region were up 28% in volume to 3,895 mt and 25% in value to $9.9 million.
  • Strong demand in Taiwan pushed January exports up 153% to 2,561 mt, with value up 70% to $4.9 million. The results for pork muscle cuts were even more impressive, nearly tripling in volume to 1,780 mt, up 196%, and climbing 149% in value to $3.8 million. Taiwan is importing less pork from the EU and Canada, so U.S. pork is gaining market share, climbing from 9% in January 2018 to 19.5% this year.
  • Pork exports to Korea eased from the record-breaking pace of 2018 but remained strong at 18,491 mt, down 2% year over year, with value down 8% to $50 million.
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