U.S. pork export streak at 17 years; beef, lamb success continues
The international marketplace continued to roll out the red carpet for U.S. pork, beef and lamb products in 2008, recording double-digit increases for all over 2007 levels, according to statistics released by the U.S. Meat Export Federation.
Pork has been the pacesetter for U.S. red meat exports, achieving a 17th consecutive record-setting year of increased export numbers in 2008. For the month of December, total pork (pork plus variety meat) export volumes rose 19.7 percent over 2007 while export values rose 19.2 percent. While those are healthy gains, they are dwarfed by the 12-month figures for 2008: volume up 57 percent to more than 2 million metric tons (4.5 billion pounds) and value up 55 percent to nearly $4.9 billion.
Total U.S. beef exports registered gains of 10.8 percent in volume and 16.5 percent in value in December versus one year ago. For the calendar year, export volumes rose 28 percent to 984,712 metric tons (nearly 2.2 billion pounds) while values jumped 38 percent to $3.6 billion.
U.S. lamb also enjoyed a solid year. The value of lamb and mutton exports (plus variety meat) rose 44 per cent to $25.3 million even as volume dropped 17 percent to 7,867 metric tons (17.3 million pounds).
While there are ups and downs on a country-by-country basis, the key export markets for U.S. red meat continue to perform fairly consistently, according to USMEF Economist Erin Daley.
"Mexico continues to dominate as the largest market for U.S. beef, while Canada is consistent with the previous two months and the first quarter of 2008, although well below volumes seen in the second and third quarters of this year," said Daley. "And exports to Japan are up 29 percent for December and 59 percent for the year in volume."
Daley noted that Mexico, the largest U.S. pork market in December, set a monthly record with 48,151 metric tons (106.2 million pounds) valued at $77 million. This represents a jump of 16 percent in volume over the prior month and a 77 percent increase over the previous December. For the year, Mexico was the third-largest destination for U.S. pork, registering a 43 percent hike in pork volume (396,609 metric tons or 874.4 million pounds) and a 54 percent jump in value (to $691 million).
The largest market for U.S. pork, Japan reported substantial gains for December and the entire year: achieving 16 and 28 percent gains in volume and value, respectively, for the month versus December of 2007, and 26 percent and 34 percent in volume and value for the year. Japan imported 451,853 metric tons (996.2 million pounds) of pork valued at $1.5 billion--accounting for 31.6 percent of total U.S. pork export value in 2008.
Areas of concern
While the numbers tell a great story, Daley notes that there are areas of concern for exports driven by the global economic slide.
"With 35 U.S. pork facilities delisted, exports to Russia could face a rough start in 2009, not to mention the challenging economic situation and the devaluation of the ruble," she said. The only good news is that Russia increased the United States' tariff rate quota (TRQ) from 50,700 metric tons (111.8 million pounds) to 100,000 metric tons (220.5 million pounds) for 2009--allowing an additional 49,300 metric tons (108.7 million pounds) to enter at 15 percent duty instead of the over-quota rate of up to 75 percent (not less than 1.5 euro/kg).
Still, for the year U.S. pork exports to Russia reached 217,767 metric tons (480.1 million pounds) valued at $476 million, increases of 118 percent in volume and 130 percent in value over 2007. In December, both the volume and value of pork exports was down sharply from one year ago, reaching the lowest volume levels since December 2006.
China is another area that bears watching, Daley believes. The greater China/Hong Kong region emerged as the No. 2 market for U.S. pork in 2008, purchasing 399,562 metric tons (880.9 million pounds) valued at $689.4 million--increases of 136 percent in volume and 155 percent in value over 2007.
However, Daley believes it is unlikely that China's pork imports in 2009 will match last year's record. Increased industry profitability last spring, coupled with a range of hog raising subsidies, is supporting a substantial expansion of China's herd and lower hog and pork prices.
According to the National Bureau of Statistics, by the end of the third quarter of 2008, China's live hog inventory had increased 6.6 percent from the year-earlier figure, and the sow population increased 12.4 percent. Total marketed hogs increased 5.8 percent and meat production was up approximately 6 percent.
On the beef front, Daley noted that it is too soon to tell how issues raised by Canada and Mexico regarding country-of-origin labeling will affect U.S. beef exports to those key markets. She noted that they are far-and-away the top two destinations for U.S. beef, accounting for 56 percent of the volume and 58.4 percent of the value of all U.S. beef exports in 2008.
--During 2008, 24.4 percent of U.S. pork production (including variety meat) was exported. This compares to 16.5 percent in 2007.
--The value of exports per head slaughtered equated to $42.31 compared to $29.16 in 2007.
--11.6 percent of beef production (including variety meat) was exported in 2008. This compares to 8 percent in 2007 and 13 percent in 2003.
--The value of exports per head slaughtered equated to $133.84 compared to $95.21 in 2007 and $136.46 in 2003 (using steer and heifer slaughter).
--2008 beef and variety meat exports equated to 94 percent of 2003 export value and 77 percent of 2003 export volume.
Other pork highlights
--Canada: U.S. pork imports remained fairly close to year-ago levels during the last quarter of 2008, with December exports at 13,390 metric tons (29.5 million pounds). For the year, exports were up 15 percent to 170,536 metric tons (nearly 376 million pounds) valued at $557.6 million, a 13 percent increase.
--"Imports of Canadian hogs were down 50 percent in January, with a corresponding increase in Canadian slaughter (up 15.8 percent) and pork production (up 9.9 percent)," Daley noted. "Live hog trade has been impacted by the weak Canadian dollar, making production in Canada more competitive."
--South Korea: Imports were steady in December at 10,535 metric tons (23.2 million pounds). Although below year-ago levels, this volume was not far off the 2008 monthly average of 11,128 metric tons (24.5 million pounds). For the year, exports to Korea were up 34 percent to 133,532 metric tons (294.4 million pounds) valued at $284.5 million, up 23 percent versus 2007 totals.
--Mexico: December exports rebounded to 31,550 metric tons (69.6 million pounds), up 8 percent from 2007 and 24 percent from the previous month. Year-end exports were up 10 percent to 396,065 metric tons (873.2 million pounds) and up 18 percent in value to nearly $1.4 billion.
--"After about a 35 percent decline in feeder cattle imports from Mexico in 2008, imports were up 60 percent through the first week in February, totaling 64,995 head," Daley said. "It remains to be seen what will happen with COOL regulations and the impact on our live animal and meat trade with our neighbors to the north and south."
--Canada: the second-largest destination for U.S. beef took 10,843 metric tons (23.9 million pounds) in December, consistent with the previous two months and the first quarter of 2008 but well below the large volumes seen in the second and third quarters of 2008. December exports were down 15 percent compared to December 2007. Year-end exports were up 17 percent totaling 154,798 metric tons (341.3 million pounds) valued at $715.6 million, up 19 percent.
--"Imports of cattle from Canada were down 39 percent through January, with a corresponding increase in Canadian slaughter and beef production, up 15 percent and 3.8 percent respectively (through Jan. 24)," said Daley.
--Japan: December exports totaled 4,176 metric tons (9.2 million pounds), up 29 percent compared to last year, putting the year-end total up 59 percent to 74,119 metric tons (163.4 million pounds) valued at $382.5 million, up 57 percent. For the year, export volume was equivalent to 20 percent of 2003 while 27.5 percent of 2003 export value was recovered.
--"USMEF-Japan continues intensive promotions of alternative cuts as well as no-roll and select products to try to increase demand for all Japan-eligible beef from the limited supply of eligible cattle," noted Daley, who said that the strong Japanese yen makes Japan an attractive trading destination for the U.S., particularly if the pool of eligible cattle could be increased to all animals under 30 months of age.
--South Korea: December exports were 3,335 metric tons (7.4 million pounds), the lowest monthly volume since the market reopened in July. Exports for the year totaled 57,267 metric tons (126.3 million pounds), up 128 percent compared to 2007 when the market was open intermittently from May through October. 2008 exports were valued at $294.4 million, making Korea the fourth-largest market for U.S. beef with the market open for less than half the year.
--"The decline in exports to Korea could be looked at as a positive, at least in the short term," said Daley. "The stocks in cold storage need to be distributed through the foodservice and retail sectors before we can expect exports to reach the levels seen in August and September last year. The large export volumes realized at market opening were expected, but retailers did not begin featuring U.S. beef until the end of November. Besides the slow resumption of U.S. beef sales, the global economic crisis has compounded the difficult situation. The Korean won has depreciated since the market opened in July last year--meaning it takes 36 percent more Korean won to buy $1 worth of U.S. beef than it did in July. At the same time, it takes about 8 percent fewer Korean won to buy Australian beef. This helps explain the increase in Korean imports of Australian beef in December."
--Daley noted that the U.S. is beginning to see positive signs from Korean department stores, which have been reluctant to sell U.S. beef. "We're hearing that these stores--which reach a broad range of Korean consumers--will begin selling U.S. beef during the first half of 2009," she said.
--Russia: exports here declined dramatically and consisted almost entirely of variety meat during November and December after unprecedented exports of muscle cuts during the summer months. Exports during December totaled only 869 metric tons (1.9 million pounds), but for the year exports were 46,163 metric tons (101.8 million pounds) with muscle cuts accounting for 15,668 metric tons (34.5 million pounds) of the total.
--"This was our first full year of access to Russia since 2003," said Daley. "The depreciation of the ruble along with the depreciation in the Brazilian real will make it difficult for the U.S. to compete on price for muscle cut exports to Russia in 2009. However, the high-end foodservice and retail sectors targeted by USMEF marketing programs will continue to grow and demand more high-quality U.S. beef." She also expects Russia's demand for U.S. beef livers to regain momentum in 2009.
Complete export statistics for U.S. beef, pork and lamb are in the statistics section of www.USMEF.org.