USMEF- Beef, pork exports continue to exceed 2007 pace
Red meat exports continued their strong pace through November, with pork up 20 percent and beef up 9 percent (including variety meat) compared to November 2007.
For the first 11 months of 2008, pork and pork variety meat exports were 61 percent larger than 2007, nearing the 2 million metric ton mark (1,898,698 metric tons or 4.18 billion pounds). 2008 pork exports through 11 months were valued at $4.5 billion, an increase of 59 percent.
The story for U.S. beef exports also remains positive. January through November beef exports were up 37 percent to 582,270 metric tons (1.28 billion pounds) with variety meat exports up 18 percent to 331,479 metric tons (730.8 million pounds). Total beef exports of 913,739 metric tons (2.01 billion pounds) were up 29 percent and valued at $3.37 billion, an increase of 40 percent. 2008 beef exports are on pace to reach 94 percent of the 2003 export value.
"Global protein supplies remain tight, with the exception of a few situations in key countries where stocks of imported red meat are weighing on the market, specifically in Korea and China," said Erin Daley, U.S. Meat Export Federation economist. "As currencies and prices stabilize, inventories will decline and demand for U.S. red meat will likely continue at a relatively strong level. Although pork exports are not expected to maintain the stunning pace of 2008, they are forecast to exceed 2007 volumes," Daley said.
"The bottom line is that, regardless of the global economic situation, people have to eat," said Daley. "U.S. beef and pork prices are lower than they were during the summer, which helps offset the increased strength of the U.S. of the dollar."
Despite the slowing of global trade in all products, pork exports from the major suppliers, the European Union, the U.S. and Canada, remained fairly steady from September through November. Pork exports from Brazil, however, declined by 50 percent in November, and its beef exports fell 35 percent compared to November 2007. Reduced exports to Russia and Hong Kong account for most of the decline. Australia's beef exports remained strong from September through November, largely due to an increase in exports to the United States, with U.S. import demand stimulated by the strengthening U.S. dollar.
For the first 11 months of the year, exports of pork and pork variety meat accounted for nearly 25 percent of production, with export value equating to $43 per head slaughtered compared to less than $30 per head during the same period in 2007, Daley said.
"Pork remains a very affordable protein, and our exports continue to defy projections," said Daley.
Mexico was the top pork export market in November, reaching another new record at 41,402 metric tons (91.3 million pounds), up 50 percent from November 2007. January through November exports to Mexico increased 40 percent to 348,458 metric tons (768.2 million pounds) valued at $614.2 million.
Japan was the second-largest market in November with exports at 40,354 metric tons (88.9 million pounds), up 22 percent. January through November, Japan was still the largest destination for U.S. pork, with exports were up 27 percent to 417,986 metric tons (921.5 million pounds) valued at $1.43 billion. Although the strong yen has unique implications for pork exports, due to the gate price system, exports are expected to remain strong in 2009 especially as the U.S. is the dominant supplier of chilled pork.
The China/Hong Kong region was the third-largest market for U.S. pork in November, with exports totaling 19,469 metric tons (42.9 million pounds), primarily to Hong Kong. Muscle cuts accounted for 8,747 metric tons (19.3 million pounds). November exports to this region were the smallest monthly volume since December 2007 and were 17 percent lower than November 2007. Still, Daley noted that January through November exports were up 148 percent, totaling 377,431 metric tons (832.1 million pounds) valued at $652.6 million. Large supplies of imported pork are weighing on the market, compounded with the increase in Chinese production. Although it is difficult to predict the pace of exports to the region in 2009, U.S. pork will benefit from the wide exposure to the product during the massive shipments in 2008.
November exports to Russia were off 8 percent from November 2007, totaling 14,613 metric tons or 32.2 million pounds (muscle cuts accounted for 8,840 metric tons or 19.5 million pounds). January through November exports to Russia were up 141 percent and totaled 214,960 metric tons (473.9 million pounds) including 148,552 metric tons (327.5 million pounds) of muscle cuts valued at $469.3 million. In 2008, muscle cut exports to Russia exceeded the U.S. tariff rate quota (TRQ) of 49,800 metric tons (109.8 million pounds) by more than 100,000 metric tons (220.5 million pounds). In other words, more than 100,000 metric tons of U.S. pork entered Russia subject at a duty of 60 percent.
As recently reported by USMEF, the U.S. TRQ for pork exports to Russia increased to 100,000 metric tons ( 220.5 million pounds) for 2009, which will be beneficial, especially considering oil priced at approximately $40/barrel and the global economic situation. It may be difficult to export large volumes of pork outside the TRQ this year, so a doubling of the quota size was critically important, Daley noted.
Pork exports to Canada set a new monthly record in November at 17,474 metric tons (38.5 million pounds), up 8 percent from November 2007. January through November exports were up 17 percent totaling 157,146 metric tons (346.4 million pounds) valued at $514.27 million.
"Exports were surprisingly strong considering the weakening of the Canadian dollar and the slowing of live hog exports to the U.S. (imports of Canadian slaughter hogs were down 38 percent during 2008)," said Daley. "Hopefully the revisions to COOL in the recently published rule will result in more favorable trade with Canada and Mexico."
Exports to South Korea were steady at 10,712 metric tons (23.6 million pounds), putting the January through November total up 42 percent to 122,997 metric tons (271.2 million pounds) valued at $262.9 million. Pork exports to Korea should remain strong, as an affordable protein with a positive image.
Other pork export markets
--ASEAN region--exports up 173 percent to 4,361 metric tons (9.6 million pounds) in November. January through November total at 54,840 metric tons (120.9 million pounds), an increase of 328 percent. The Philippines, Vietnam and Singapore are the largest markets. Recent exports to Vietnam have declined dramatically due to large supplies and low prices in China, but exports to the Philippines and Singapore remain significantly larger than historical levels.
--European Union--up 127 percent to 4,584 metric tons (10.1 million pounds) in November. January through November totals up 146 percent to 44,764 metric tons (98.7 million pounds).
--Australia - up 64 percent in November, totaling 3,123 metric tons (6.9 pounds) with a January through November increase of 36 percent to 38,176 metric tons (84.2 million pounds). Exports to New Zealand were up 17 percent, totaling 6,040 metric tons (13.3 million pounds) through November.
--Central and South America--up 30 percent to 5,001 metric tons (11 million pounds) with exports up 22 percent through November, totaling 36,465 metric tons (80.4 million pounds). Honduras is the largest market, followed by Colombia and Guatemala.
--Caribbean (excluding the Dominican Republic)--up 77 percent to 3,025 metric tons (6.7 million pounds) in November with exports up 21 percent through November, totaling 18,228 (40.2 million pounds).
--Dominican Republic--up 103 percent to 1,127 metric tons (2.5 million pounds) in November, putting the January through November total at 12,453 metric tons (27.5 million pounds), up 158 percent.
--Taiwan--up 89 percent through November, totaling 28,735 metric tons (63.3 million pounds).
Nearly 11 percent of U.S. beef and beef variety meat production was exported in January through November 2008. Export value equated to $134.83 per head of steer and heifer slaughter. For comparison, in 2003 approximately 13 percent of production was exported, with exports equating to $136.46 per head.
"The top market for U.S. beef, Mexico, has been hit by the weak peso and the recession," said Daley. "U.S. round prices remained above year-ago levels during November and this, combined with the weak peso, resulted in slower beef exports to Mexico."
Beef exports to Mexico were down 16 percent in November to 12,872 metric tons (28.4 million pounds) but January through November exports were still up 11 percent, totaling 194,275 metric tons (428.3 million pounds). Variety meat exports were up 10 percent through November, totaling 170,240 metric tons (375.3 million pounds), with combined beef and variety meat exports up 10 percent as well, totaling 364,515 metric tons (803.6 million pounds) and up 18 percent to $1.29 billion. Mexico accounted for 40 percent of U.S. beef and variety meat export volume from January through November 2008. U.S. imports of Mexican feeder cattle declined by 34.6 percent in 2008, totaling just 702,873 head.
Exports to Canada accounted for 16 percent of total U.S. export volume and 20 percent of U.S. export value through November. Exports to Canada were down 15 percent in November to 10,950 metric tons (24.1 million pounds), but January through November exports were up 21 percent to 143,955 metric tons (317.4 million pounds) valued at $669.8 million (including variety meats). Similar to hogs, U.S. imports of Canadian slaughter cattle were down 24 percent in 2008.
Exports to Japan were up 41 percent to 5,264 metric tons (11.6 million pounds) in November, but this was the lowest monthly volume since April, likely due to fewer available cattle under 21 months of age, Daley noted. January through November exports were up 61 percent to 69,943 metric tons (154.2 million pounds) valued at $359.4 million. USMEF's continued promotion of alternative cuts is helping to maximize the amount of beef exported to Japan despite the limited market access situation.
Exports to the Middle East were up 25 percent in November at 9,541 metric tons (21 million pounds) with January through November exports down 3 percent in volume but up 36 percent in value, totaling 85,663 metric tons (188.9 million pounds) valued at $138.4 million. Liver exports to Egypt still account for the bulk of export volume, but beef muscle cut exports to the region were up 68 percent to 10,700 metric tons (23.6 million pounds) through November, primarily destined for the United Arab Emirates (UAE), Saudi Arabia and Kuwait. Retail sales of U.S. beef in the UAE and Saudi Arabia supported the growth in exports in 2008.
South Korea imported 6,986 metric tons (15.4 million pounds) in November, with exports through November totaling 53,932 metric tons (118.9 million pounds), more than double exports during the sporadic market opening in 2007. Large supplies of beef remain in cold storage in Korea, despite the resumption of beef sales by the major retailers in late November. Although retail sales help build confidence in U.S. beef, foodservice will be the major outlet for the frozen beef stocks. Many factors are limiting U.S. beef sales at the restaurant level including the new country of origin labeling requirement, the economic slowdown and lingering concerns about consumer acceptance.
The ASEAN region has maintained an impressive pace of beef imports through the economic downturn, with November U.S. exports up 92 percent to 4,700 metric tons (10.4 million pounds) and up 233 percent through November to 49,783 metric tons (109.8 million pounds) valued at $153 million. Vietnam accounted for 37,648 metric tons (82.9 million pounds) with the remainder primarily destined for Philippines (7,984 metric tons or 17.6 million pounds) and Indonesia (2,962 metric tons or 6.5 million pounds).
Exports to Russia were 1,624 metric tons (3.6 million pounds), primarily variety meats, during November, with exports totaling 45,294 metric tons (99.9 million pounds) through November. Beef muscle meat exports accounted for 15,636 metric tons (34.5 million pounds) of the total, but muscle cut exports have been minimal since the record large shipments during the summer and early fall, prior to the credit crisis and weakening of the ruble.
U.S. beef exports to Taiwan hit 1,940 metric tons (4.3 million pounds) in November, down 31 percent compared to a year ago, but were larger than exports in September and October 2008. Through November, exports were up 20 percent totaling 24,961 metric tons (55 million pounds) valued at $117 million.
Other Beef Markets
--The Caribbean--exports to this region were up 3 percent for the first 11 months to 17,710 metric tons (39 million pounds), valued at $70 million, up 14 percent (including the Dominican Republic). For November, exports were up 9 percent in volume and 7 percent in value over November 2007.
--Central and South America--exports were up 21 percent to 9,819 metric tons (21.6 million pounds) through November -- 45 percent of the exports were destined for Peru (livers and hearts). Exports were valued at $23.5 million, a 48 percent increase. November exports declined slightly in volume from 2007, but increased 16 percent in value.
--Hong Kong--exports were up 3 percent to 8,743 metric tons (19.3 million pounds) through November, but the value of those exports was up 19 percent in value to $37.5 million. November exports increased by 13 percent in volume and 10 percent in value over November 2007.