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USMEF: April pork, beef exports reflect tough economic climate

Despite the prolonged slowdown in global economic activity and the initial wave of A-H1N1 Influenza-related market reactions, exports of U.S. pork and beef held up reasonably well in the month of April. While pork plus pork variety meat exports declined by 10 percent in volume compared to April 2008, the drop in value was limited to about 4 percent. For the first four months of the year, pork export volume (648,063 metric tons or 1.43 billion pounds) is about 3 percent above the record pace of 2008, and the value has increased about 6 percent to $1.495 billion.

April beef plus beef variety meat exports declined 1.4 percent in volume and by 6 percent in value compared to last year. For the first four months of the year, beef export volume has increased 2 percent to 277,019 metric tons (610.7 million pounds) but declined slightly in value to $937 million.

"The good news is that in spite of the turmoil we saw in the latter part of the month, April pork exports were not down as much as had been predicted given the continued economic slump," said U.S. Meat Export Federation President and CEO Philip Seng. "But while international markets are still a relative bright spot for the pork industry, we know they're one part--and an important part--in the profitability of the U.S. pork industry. USMEF's team around the world is focused on expanding export opportunities and helping to provide the kind of momentum hog producers need right now.

"The trade environment for beef was not directly impacted by A-H1N1 Influenza as much as it was for pork," Seng said. "But anytime consumer activity takes such a major hit, beef trade is likely to suffer. I believe U.S. beef will perform well this year, but we need to see an economic rebound in key markets like Mexico, South Korea and Taiwan, and the industry also needs expanded access in many of these markets so we can move a wider range of cuts."

Specifically, the beef industry is working with trade officials to gain access for U.S. beef in Taiwan that includes bone-in cuts and variety meat. The industry is also seeking relief from the 21-month age limit for cattle from which beef is eligible for export to Japan. Beef exports from four states--Illinois, Texas, Washington and Wisconsin--have also been suspended temporarily by Russia.

Mexico continues to be the pacesetter for U.S. pork exports in 2009, with April exports climbing 61 percent in volume and 50 percent in value compared to last year. For the first four months of the year, pork export volume to Mexico is up 71 percent to 177,164 metric tons (390.6 million pounds) and the value has increased 62 percent to $265 million. April export results, however, reflect only a partial-month impact from A-H1N1 Influenza. Because inventories backed up during the influenza-related slowdown of business activity in Mexico and consumer demand for pork is only recently returning to normal, this situation is likely to have a noticeable impact on May export results.

Perennially the leading market for U.S. pork exports, Japan is performing well again in 2009 with export volume for the first four months of the year increasing 9 percent to 158,265 metric tons (348.9 million pounds) and value up 24 percent to $571 million. While Japan's April export volume was down slightly due to higher inventories and lower domestic pork prices, exports still increased in value by nearly 19 percent.

Other markets performing well in April included the Caribbean, where pork exports increased by 60 percent in volume and nearly 50 percent in value over last year. For January-April, pork exports to this region have climbed 70 percent in volume and 66 percent in value over 2008. April exports to Taiwan increased 46 percent in volume and 43 percent in value compared to April 2008, and in the first four months of the year have more than doubled in both volume and value over last year's totals.

Exports to Mexico and Canada--the top two markets for U.S. beef in 2008--continue to struggle due to a number of factors. Exchange rates are far less favorable than last year and the down economy--especially in Mexico--has steered consumers toward lower-priced proteins. As a result, beef exports to Mexico are down more than 20 percent in volume and value compared to the first four months of last year.

In Canada, U.S. beef exports have declined about 10 percent in volume and 16 percent in value compared to 2008. While a decline in live cattle imports from Canada to the United States might suggest an increase in domestic supply, Canada's cattle slaughter is actually down about 2 percent from last year. This reflects a continued contraction in the Canadian cattle herd, which may bode well for increased beef exports to Canada once more favorable economic conditions return.

The ASEAN region has been a mainstay for U.S. beef exports this year, and April was no exception. Exports to the region increased by 72 percent in volume and percent in value over April 2008. Led by a surge in activity in Vietnam, exports to the ASEAN region have increased by 63 percent in volume (to 26,030 metric tons or 57.4 million pounds) and 93 percent in value (to $84.3 million) over January-April of last year.

Japan continues to regain strength as a destination for U.S. beef, with April exports climbing by 10 percent over April 2008. For the first four months of the year, beef exports to Japan have increased by about 25 percent in both volume and value compared the same period last year, totaling 19.914 metric tons (43.9 million pounds) valued at about $106 million.

Complete April export statistics for pork, beef and lamb can be found online on USMEF's statistics page.

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