Source: U.S. Meat Export Federation
U.S. pork and beef exports continued to trend above year-ago levels in June, capping a very strong first half of the year. According to statistics released by USDA and compiled by the U.S. Meat Export Federation, exports also achieved higher values on a per-head-slaughtered basis and accounted for a steady-to-higher percentage of total production.
June beef exports were the largest of 2017, reaching 109,554 metric tons – up 11% year-over-year and the largest June total since 2011. Export value increased 10 percent to $602.5 million. For January through June, beef exports were up 12% in volume (606,876 mt) and 15% in value ($3.35 billion) compared to the first half of last year.
Exports accounted for nearly 13% of total U.S. beef production in June and 10% for muscle cuts only – each about even with a year ago. The ratios were the same for January through June, which was also steady with the first half of last year. Export value per head of fed slaughter averaged $264.51 in June, up 6%from a year ago. Through June, per-head export value was up 8% to $269.21.
Pork exports totaled 200,229 mt in June, up 6% year-over-year and the largest June volume on record, valued at $527.1 million, up 4%. This pushed the first-half total to 1.25 million mt valued at $3.21 billion – up 13% and 16%, respectively.
Exports accounted for 27% of total pork production (up more than one percentage point from a year ago) in June and 22% for muscle cuts only (steady with last year). For the first half, with production at a record pace, both ratios increased significantly from a year ago. The percentage of total production jumped from 25.3% to 27.8%, and for muscle cuts the increase was from 21.4% to 23%. Export value per head slaughtered in June was up 1% to $53.41 and the first-half average increased 12%to $54.09.
“In this time of large red meat production, the upward trend in per-head export value and in the percentage of production exported is especially critical to the industry,” says USMEF President and CEO Philip Seng. “These metrics confirm that we’re not simply exporting more red meat because more is available – those exports are also generating excellent returns. It was also gratifying to see that the U.S. trade deficit narrowed in June due to an expansion of exports, knowing that the red meat industry made another solid contribution toward that effort.”
First-half pork export growth led by Mexico, Korea, South America
Pork exports to leading volume market Mexico remained on a record pace in June, increasing 19%year-over-year in both volume (64,712 mt) and value ($124.9 million). This pushed the first-half total to 398,565 mt (up 23%) valued at $731.6 million (up 29%). A major factor behind this increase is that Mexican consumers are eating significantly more pork, both imported and domestic. Over the past 10 years, Mexico’s annual per-capita pork consumption has increased by about one-third, and is expected to reach 18 kilograms this year (carcass weight equivalent), based on USDA estimates. Over the same period, Mexico’s pork production has increased by 30%.
June exports to leading value destination Japan were below year ago levels, dipping by 8%in volume (30,401 mt) and 10% in value ($124.3 million). But first-half totals remained higher than a year ago at 200,175 mt (up 4%) valued at $810.6 million (up 8%). Chilled pork exports to Japan declined 2% to 107,032 mt, but value increased 5%to $501 million. The U.S. holds 55% of the chilled pork market in Japan and continues to face growing competition from Canadian pork.
Other first-half highlights for U.S. pork exports included:
Capitalizing on rapid growth in home meal replacement items and other foods that emphasize convenience, as well as duty-free status for most cuts under the Korea-U.S. Free Trade Agreement, pork exports to South Korea climbed 31% from a year ago to 94,545 mt, valued at $258.5 million (up 38%). With a strong second half, exports to Korea could exceed the record set in 2011, when Korea was facing a domestic pork shortage due to foot-and-mouth disease. This year Korea’s imports have been driven by strong consumer demand, as Korea’s domestic pork production is slightly ahead of last year’s pace.
While exports to China/Hong Kong fell below last year’s pace in volume (271,297 mt), value still increased 3% ($558.4 million). This reflected the strong price commanded for pork variety meat, as first-half variety meat exports to the region climbed 19% in volume (172,269 mt) and 28% in value ($367.2 million).
Led by exceptional growth in Colombia and Chile, pork exports to Central and South America were up 51%in volume (81,930 mt) and 56% in value ($200.3 million). Exports also doubled to Peru and solid increases were achieved in Honduras, Panama, Nicaragua and El Salvador.
Strong growth in the Dominican Republic pushed pork exports to the Caribbean up 36% in volume (26,984 mt) and 35% in value ($63.7 million). Exports also increased to the Bahamas, Trinidad and Tobago, Haiti and Barbados.
Larger shipments to the Philippines and Singapore helped drive exports to the ASEAN region up 20% in volume (23,207 mt) and 28% in value ($59 million).
Led by the above-mentioned success in China/Hong Kong, pork variety meat exports achieved exceptional growth in the first half, increasing 19% year-over-year in volume (286,787 mt) and 32% in value ($580.3 million). Additional markets contributing to this growth included Mexico, Canada, Chile, Colombia and the Philippines. Variety meat export value averaged $9.78 per head slaughtered in the first half, up $2.10 from a year ago.
Chilled beef to Asia drives first-half growth, but exports increased to most destinations
Beef exports to leading market Japan continued to gain momentum in June, with volume up 7% to 27,521 mt and value up 13% to $174.4 million (the highest since 2000). First-half exports to Japan exceeded last year’s pace by 23% in volume (150,812 mt) and 28% in value ($905.8 million). This included a 40% increase in chilled beef exports to 70,807 mt, valued at $511 million (up 38%), as the United States captured more than 50% of the chilled beef market. While demand for U.S. beef is very strong in Japan’s retail and foodservice sectors, frozen exports to Japan face a higher tariff rate through March 2018.
June exports to South Korea were the largest since January at 14,701 mt, up 14% from a year ago, valued at $92.4 million (up 20% and the highest of 2017). First-half exports to Korea were up 13% in volume (83,357 mt) and 21% in value ($527.7 million). The United States also captured more than 50% of Korea’s chilled beef market as chilled exports totaled 18,816 mt (up 83%year-over-year) valued at $166 million (up 86%).
Other first-half highlights for U.S. beef exports included:
Exports to Taiwan totaled 20,376 mt (up 19% from a year ago) valued at $179 million (up 26%). This included chilled beef exports of 8,178 mt (up 19%) valued at $93.5 million (up 22%) as the U.S. captured more than 70% of Taiwan’s chilled beef market.
After a slow start to the year, exports to Hong Kong rebounded to post double-digit first-half gains in both volume (56,846, up 11%) and value ($357.4 million, up 17%).
Exports to Mexico increased 3% in volume (114,923 mt) while slipping 3% in value ($459.7 million). But muscle cut exports to Mexico – mainly shoulder clods, rounds and other end cuts – fared better, increasing 9% in volume (61,782 mt) and 2% in value ($353.8 million).
Led by a doubling of exports to Vietnam and Indonesia and strong demand in the Philippines, exports to the ASEAN region increased 85% in volume (20,532) and 61% in value to $99 million.
Fueled by strong growth in Chile, Guatemala and Colombia, exports to Central and South America increased 11% in volume (19,137 mt) and 5% in value ($83.8 million). Exports to Brazil, which began in late April, totaled 412 mt of muscle cuts and 651 mt of variety meat at a combined value of $2.6 million.
After reopening in 2016, South Africa quickly emerged as the fourth-largest destination for U.S. beef variety meat, with first-half exports (mainly livers) reaching 7,849 mt – an increase of nearly 500% from a year ago – valued at $6 million.