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July pork exports slip despite powerful growth in Mexico, Korea, South America

Pork export illustration
U.S. beef exports stay red-hot in July; pork exports lower.

Source: U.S. Meat Export Federation
July pork export volume dipped below its year-ago level for the first time in 15 months, with export value also down slightly. U.S. beef exports remained well above last year’s pace in July, posting one of the highest monthly export value totals on record, according to statistics released by USDA and compiled by the U.S. Meat Export Federation.

July beef exports totaled 104,488 metric tons, up 5% year-over-year, while export value reached $623.7 million — up 18% from a year ago and the highest since December 2014. For January through July, exports increased 11% in volume (711,364 mt) and 15% in value ($3.97 billion) compared to the first seven months of last year.

Exports accounted for 13.2% of total U.S. beef production in July and 10.7% for muscle cuts only. These were the highest ratios of 2017, but down from 14.2% and 11%, respectively, last July. For January through July, beef exports accounted for 12.8% of total production and 10% for muscle cuts — roughly steady with last year. Export value per head of fed slaughter averaged $299.21 in July, up more than $35 (or 13%) from a year ago. Through July, per-head export value was up 9% to $273.52.

Pork exports totaled 173,675 mt in July, down 4% year-over-year, valued at $488.9 million, down 0.6%. January-July volume was still up 11% from a year ago to 1.43 million mt, while export value was up 13% to $3.7 billion.

Exports accounted for 26% of total pork production in July (down from 27.5% a year ago) and 21% for muscle cuts only (down from 23%). For the first seven months of the year, with U.S. production at a record pace, the percentage of total production exported increased from 25.6% to 27.5%. For muscle cuts only, the increase was from 21.6% to 23%. Export value per head slaughtered in July was $54.22 — up slightly from June but 3% below last July. The January-July per-head average increased 10% from a year ago to $54.11.

“July was certainly a solid month, especially for beef exports, but these results remind us that the U.S. red meat industry operates in an intensely competitive global environment,” says USMEF CEO Philip Seng. “At a time when some of our most essential trade agreements are under review, we must be mindful of how these agreements have helped make U.S. beef, pork and lamb more readily available and more affordable for millions of global customers, to the benefit of U.S. producers and everyone in the U.S. supply chain.”

July pork exports drop
Pork exports to Mexico remained on pace for a sixth consecutive annual volume record, with July volume up 7% from a year ago to 58,625 mt and value increasing 9% to $122.9 million. Through July, exports increased 20% in volume (457,190 mt) and 26% in value ($854.4 million). Both the U.S. and domestic pork industries continue to reap the benefits of Mexico’s rapidly growing per capita pork consumption, which has increased by about one-third over the past 10 years to 18 kilograms annually (based on USDA estimates).

Leading pork value market Japan saw a year-over-year decline in July, as exports dipped 7% in both volume (28,314 mt) and value ($120.5 million). Through July, exports to Japan remained modestly higher year-over-year in both volume (228,489 mt, up 2%) and value ($931.1 million, up 6%). This included chilled pork exports of 122,755 mt (down 3%) valued at $577 million (up 3%), as Canada continues to compete strongly for Japan’s high-value chilled pork market.

Other January-July highlights for U.S. pork exports included:

• In South Korea, pork exports continued to capitalize on strong red meat consumption growth, especially for convenience products and home meal replacement items, as exports to Korea climbed 30% in volume (103,142 mt) and 36% in value ($282.6 million).

• Led by strong growth in Colombia and Chile, pork exports to South America more than doubled year-over year in both volume (56,345, up 104%) and value ($143.6 million, up 109%). The White House recently announced that Argentina will soon open to U.S. pork, adding further opportunities in this growing region.

• Led by Honduras, exports to Central America are on a record pace, reaching 38,720 mt, up 6% from a year ago, valued at $92.4 million (up 8%). 2017 is also shaping up as a record year for pork exports to the Dominican Republic, where exports totaled 21,278 mt (up 42%) valued at $47.8 million (up 49%).

• Strong growth in the Philippines fueled a 24% increase (to 26,710 mt) in pork exports to the ASEAN region, valued at $68.8 million (up 34%). Exports also increased to Singapore and were steady to Vietnam.

• In the China/Hong Kong region, July exports dropped significantly from a year ago to 32,167 mt (down 33%) valued at $68.8 million (down 27%). July variety meat exports were the smallest in 18 months at 22,960 mt (down 10%). As China’s domestic pork production continues to rebound in 2017, January-July exports to the region were 8% below last year’s pace in volume (306,404 mt) but slipped just 1% in value ($627.1 million).

Beef export volume to Japan largest in four years; value highest of post-BSE era
Beef exports to leading market Japan totaled 27,689 mt in July, up 20% from a year ago and the largest since July 2013 — which was shortly after Japan increased the eligible U.S. cattle age to 30 months. July export value to Japan increased 36% to $175.7 million, the highest monthly total since 1996. For January through July, exports to Japan were up 23% in volume (178,501 mt) and 29% in value ($1.08 billion).

USMEF’s featuring of chilled beef in Japan continues to pay dividends as chilled exports were up 39% to 83,951 mt valued at $613 million (up 40%). Driven by strong growth in Japan’s foodservice industry, especially the gyudon beef bowl chains which heavily rely on U.S. short plate, U.S. frozen beef exports to Japan were up 12% to 64,928 mt (valued at $250 million, up 18%). But Japan’s frozen beef safeguard was triggered in late-July, increasing the duty on frozen beef imports from suppliers without a trade agreement with Japan, including the United States, from 38.5% to 50%. The impact of the safeguard is not likely to surface until the September export data is available. But since August, U.S. frozen beef has been at an even larger tariff disadvantage compared to Australian beef, which is subject to a duty rate of 27.2% under the Japan-Australia Economic Partnership Agreement.

Beef exports to South Korea dipped below the large volume of last July to 15,587 mt (down 5%), but were still the largest of 2017. July export value to Korea increased 8% from a year ago to $101.7 million. Through July, exports to Korea increased 9% in volume (98,944 mt) and 19% in value ($629.4 million), including an impressive 83% increase in chilled beef exports (22,432 mt) valued at $199 million (up 88%). The U.S. is now the largest supplier of beef to both Japan and Korea on a value basis, with the U.S. share of Korea’s imports increasing from 43% to 48.5%.

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