Economic headwinds continued to slow U.S. pork and beef exports in July, according to data released by the U.S. Department of Agriculture and compiled by the U.S. Meat Export Federation. July pork exports totaled 166,604 metric tons (mt), down 4%from a year ago and the smallest since January. Export value was $443 million, down 23% from a year ago and the lowest monthly total in more than four years. For January through July, pork exports totaled 1.25 million mt (down 5%) valued at $3.32 billion (down 17%).
For U.S. beef, July exports totaled 91,955 mt, down 10%from a year ago and the smallest volume since 2010. Export value was $555.7 million, down 11%. For January through July, beef export volume was down 10% to 619,064 mt. Export value was $3.81 billion, 2% below last year’s pace.
“Market access issues and the sustained strength of the U.S. dollar continue to make 2015 a very tough year for red meat exports,” said Philip M. Seng, USMEF president and chief executive officer. “On the beef side, exports are also constrained by lower production, but the herd rebuilding that is currently limiting our beef supplies is overdue, and will pay dividends in 2016 and beyond.”
USMEF said closure of the Russian market to the top three global pork suppliers has not only cut off direct U.S. exports to Russia but also caused an influx of European and Canadian pork into key markets in Asia, Oceania and Latin America.
“Compounded by larger production in the major exporting countries, pork prices have been pressured in most major markets, with the exception of China,” USMEF noted. “Even though the record spread between prices in China and the U.S. indicates large export opportunities, limited access for U.S. pork means the benefits are primarily accruing to European suppliers. U.S. beef’s lack of access to the Chinese market continues to result in missed opportunities in China and impacts the price U.S. beef cuts command in other Asian markets.”
USMEF also said China’s mid-August devaluation of the yuan sent currencies of several key importing countries and large competitors lower versus the U.S. dollar. The Korean won, the Taiwanese dollar and the Mexican peso all weakened significantly. As for competitors, USMEF said the Australian and New Zealand dollars have been trading at levels not seen since 2009 and the Brazilian real is at its weakest point in more than a decade.
“U.S. exports were already facing a very challenging situation with regard to exchange rates, and that situation worsened over the past three weeks,” Seng explained. “This means we must work even harder to differentiate U.S. meat based on attributes other than price by educating international buyers on the quality and value our products deliver. This has always been a strong focus for USMEF, but it’s more important than ever that we establish and maintain customer loyalty in our key markets.”