February exports of U.S. pork and beef were roughly steady with last year’s volumes but export value moved lower as prices continued to decline from the 2014 highs, according to statistics released by USDA and compiled by the U.S. Meat Export Federation. The price reductions reflect more abundant red meat supplies and a fiercely competitive international marketplace.
Pork export volume was 171,413 metric tons in February, down 1% from a year ago, while value fell 12% to $414.3 million. For the first two months of the year, pork export volume remained 1% ahead of last year’s pace at 338,423 mt, but value was down 12% to $819.1 million.
February beef exports totaled 83,203 mt, up slightly from last year, while value dropped 18% to $437 million. January-February exports were up 2% in volume (165,504 mt) from a year ago but fell 16% in value ($875.1 million).
USMEF President and CEO Philip Seng says the February results fell short of expectations.
“Given the headwinds U.S. exports faced early last year, including the severe congestion in the West Coast ports, we expected to see year-to-year increases in most markets, but the actual picture was mixed,” Seng explains. “Beef exports did rebound in most Asian markets compared to February 2015, but these gains were largely offset by declines in our neighboring markets. U.S. pork continues to regain traction in China/Hong Kong, but exports slowed to our other major Asian destinations.”
2016 pork exports off to strong start
Momentum continues to build for U.S. exports to China/Hong Kong, extending the trend that began in the fourth quarter of last year. Through February, exports were 86% above last year’s pace in volume (73,536 mt) and 50% higher in value ($138.6 million).
“Declines in Chinese hog numbers and pork production have pushed prices to the highest level since 2011, triggering larger imports from all suppliers,” Seng says. “To capitalize on these supply and demand dynamics, USMEF has stepped up efforts to educate importers about the availability, quality, consistency and affordability of U.S. pork. At the same time, the import market continues to receive large volumes of very competitively priced product from Europe. We are in a battle for market share, not only in China but also in all key Asian markets.”
Other notable January-February results for U.S. pork include:
- Pork shipments to both Australia and New Zealand were up substantially, as exports to the Oceania region increased 56% from a year ago in volume (11,379 mt) and 14% in value ($31 million).
- Exports to Central America were up 38% (10,322 mt) with value up 26% ($23.6 million), driven by strong growth to Honduras and Guatemala.
- Led by strong results in the Dominican Republic, exports to the Caribbean were up 12% from a year ago in volume (6,475 mt) and steady in value ($15.3 million).
- Export volume to the ASEAN region was steady with last year at 6,450 mt while value increased 13% to $15.9 million, led by growth in the Philippines and Vietnam.
- Exports to South Korea and Mexico were down significantly from last year’s large volumes, while exports to Japan were also lower. Larger domestic supplies and lower prices have, to some extent, slowed import demand in these key markets. Exports to Japan are expected to regain momentum in coming months as Japanese ham and sausage manufacturers rebuild their frozen pork inventories and U.S. chilled pork continues to regain traction. Korea’s imports are expect to slow slightly from last year’s large volumes, but frozen U.S. pork will benefit from zero duties. Further weakness in the Mexican peso is creating challenges in the top volume market for U.S. pork, as Canada has been gaining market share.
Overseas gains for beef exports offset by slow demand in Mexico, Canada
Through February, beef export volume moved higher than a year ago in most Asian markets and Central America and was relatively steady in the Middle East and the Caribbean. Demand slowed substantially, however, in Mexico and Canada, last year’s No. 1 and No. 4 volume destinations for U.S. beef.
“U.S. beef is well-positioned to regain market share in Asia this year,” Seng explains. “Increased slaughter numbers are generating larger supplies of the cuts needed to serve our Asian customers, and this will bolster our marketing efforts in both the foodservice and retail sectors. But we need to find even more innovative ways to maintain beef demand in Mexico, where the weak peso has effectively offset any softening of U.S. beef prices.”
January-February market highlights for U.S. beef include:
- Japan reclaimed its position as U.S. beef’s leading volume destination (32,890 mt, +11% year-over-year). Japan was also the top value market, though export value was down 12% to $180 million. U.S. exports to Japan are expected to recover market share this year, with smaller available supplies (and higher prices) from Australia, as well as recent strengthening of the yen, helping offset some of Australia’s tariff advantage.
- Exports to Korea increased 28% from a year ago in volume (23,045 mt) but fell 2% in value to $135.5 million. Smaller domestic production and high prices have helped stimulate demand for larger imports. High-quality U.S. beef is well-positioned to help meet this need, while also helping to fuel consumption growth in Korea.
- Exports to Hong Kong rebounded to 20,545 mt (+18%) but value fell 14% to $118.6 million.
- Taiwan, where the United States is the dominant supplier of chilled beef, achieved year-over-year growth in both volume (5,052 mt, +25%) and value ($44.2 million, +6%).
- Exports to Central America increased by 50% (2,252 mt) with value up 37% ($12.6 million), driven by strong growth to El Salvador, Panama and Honduras.
- Exports to Mexico fell 18% in volume (31,850 mt) and 28% in value ($143.4 million), while exports to Canada were down 11% (17,532 mt) and 25% ($104.7 million), respectively.