July pace remains sluggish for U.S. pork, beef exports
January through July exports of U.S. pork and beef are lagging behind last year's pace amid a difficult global economic climate and lingering effects from the H1N1 influenza outbreak. The most recent statistics released by USDA and compiled by the U.S. Meat Export Federation show pork exports of 1.08 million metric tons (2.38 billion pounds) valued at $2.53 billion. While these totals are a respective 10 percent and 9 percent below last year's record-shattering pace, they are still 53 percent higher in volume and 48 percent higher in value than in January-July 2007.
Beef exports of 512,053 metric tons (1.13 billion pounds) valued at $1.944 billion are 6 percent below last year's volume and 10 percent lower in value. This difference, however, is primarily due to a very sluggish global market for beef variety meat. Beef muscle cut exports of 338,217 metric tons (745.6 million pounds) are actually slightly above last year's volume, while trailing in value ($1.445 billion versus $1.48 billion) by only 2 percent.
Mexico, Russia demand showing recovery, but pork exports hurt by China's ban
Mexico has been a tremendous bright spot for U.S. pork throughout 2009, but the surge in exports to Mexico suffered a setback recently during the H1N1 influenza outbreak. Through April, pork exports to Mexico were running 71 percent above last year's pace in terms of volume and were 62 percent higher in value. The results for May, June and July have been roughly equal to 2008, however, leaving Mexico with totals of 287,687 metric tons (634.2 million pounds) valued at $426.5 million--which is 42 percent higher than the 2008 volume and 23 percent higher in value.
"Pork exports to Mexico are still having a terrific year," said USMEF Chairman Jon Caspers, a pork producer from Swaledale, Iowa. "But there's no question that H1N1 caused a lot of economic disruption in Mexico and created a backlog in pork inventories. Hopefully we're past the worst of that situation, and can move back toward the level of activity we saw earlier this year."
Japan remains the pacesetter for U.S. pork in terms of value, reaching 259,451 metric tons (572 million pounds) valued at $944.1 million through July. While these results are only slightly above the 2008 volume, they exceed last year's value by 11 percent. Other markets showing significant improvement include Australia (up 22 percent in volume and 21 percent in value) and the Caribbean (up 42 percent and 35 percent, respectively).
Pork exports to China had already slowed significantly prior to the market closing in early May due to H1N1 influenza. Caspers notes, however, that being essentially shut out of this market for the past four months is a setback the pork industry simply cannot afford.
"Our expectations for China were modest for this year, because we knew they would have much higher domestic production," he said. "But being shut off completely from the world's largest pork-consuming market is a very serious blow for the industry."
There is no relationship between pork consumption and H1N1 influenza, and consumer attitudes toward pork appear to have recovered quickly despite the media's persistent mislabeling of the virus as "swine flu." But Caspers, who was in China last week for the World Pork Conference, said market research in China reveals that more consumer education is needed on this issue (see USMEF's Sept. 3 news release for more details).
"Across the entire globe, the pork industry cannot afford to have China's consumers turning away from our product," he said. "Whether you are a pork producer in Iowa, Indiana, China or Chile, this is a very serious problem. Hopefully we can all work together to provide better information to China's consumers and turn this situation around."
Pork exports to Russia are also down about 30 percent compared to last year, due in part to state-specific, H1N1-related market closures in May and June. Exports have also slowed due to the continued delisting of many U.S. pork plants by Russia. The good news, however, is that July pork exports to Russia--19,625 metric tons (43.3 million pounds) valued at $43.1 million--nearly doubled in volume and more than doubled in value over the June 2009 totals.
U.S. pork exports are also holding up fairly well in terms of percentage of total production. Pork and variety meat exports accounted for 22.8 percent of January-July production, compared to 24.7 percent during the same period last year. Muscle cut exports accounted for 18.3 percent of production, compared to 21.5 percent in January-July 2008.
Beef exports to Asia on the rise, but neighboring markets lagging
Slow demand in Mexico and Canada and a steep decline in beef variety meat exports are the main factors keeping U.S. beef exports below last year's pace. January-July exports to Mexico reached only 180,350 metric tons (397.6 million pounds) valued at $570.7 million--which is 25 percent below the 2008 volume and 31 percent below last year's value. This decline is particularly severe on the beef variety meat side, as beef variety meat exports to Mexico have dropped by 35 percent in volume and 47 percent in value.
Exports to Canada (about 84,000 metric tons or 185.2 million pounds, valued at $366.4 million) have fallen 12 percent behind last year's volume and by 18 percent in value. This may be due in part to the steep decline (about 30 percent from January through August) in live cattle exports from Canada to the United States, though Canada's domestic slaughter is also down by 1.5 percent.
"These results are disappointing, because our recent record of success in Mexico and Canada has been critical to the profitability of U.S. cattlemen," said USMEF Chairman-elect Jim Peterson, a cattle producer from Buffalo, Mont. "We need to see better demand for U.S. beef in these markets, and hopefully the recent strengthening of the peso and especially the Canadian dollar will drive some improvement in the coming months."
U.S. beef continues to rebuild its presence in Asia, led by an 18 percent increase in Japan over January-July 2008 and a dramatic increase in exports to Hong Kong. The July total for Hong Kong of 2,756 metric tons (6.1 million pounds) valued at $9.6 million was more than five times the volume and more than four times the value achieved in July 2008, pushing 2009 exports 111 percent above last year's volume and 60 percent above last year's value.
January-July exports to Taiwan are still down slightly from last year, but showing signs of recovery. July exports to Taiwan reached their second-highest monthly total of the year, and July was only the second month in which 2009 exports to Taiwan exceeded the corresponding month's total from 2008.
Beef exports to Vietnam have increased 38 percent in volume and 59 percent in value over January-July of 2008. July was the second consecutive month, however, in which exports to Vietnam were lower than the corresponding 2008 total. January through July exports to South Korea totaled 28,440 metric tons (or 62.7 million pounds) valued at $111.1 million. But their pace has also slowed, with the July volume being the smallest since the market reopened last year.
In terms of total U.S. production, beef plus beef variety meat exports are accounting for about the same percentage as last year--9.8 percent in January-July 2009, compared to 10 percent during the same period in 2008.
Lamb exports continue 2009 surge
U.S. lamb and lamb variety meat exports are weathering current economic conditions exceptionally well--rising by 55 percent in volume and 18 percent in value over January-July 2008. The growth in lamb exports has been driven by strong demand in Mexico, where exports have nearly tripled over last year. The Caribbean continues to serve as a mainstay destination for U.S. lamb, despite a slight decline in volume to Bermuda when compared to last year. Bermuda's export value, however, is still up 15 percent over last year, and lamb exports to the region have been further strengthened by large increases in shipments to the Bahamas and the Netherlands Antilles.
All updated export statistics for U.S. pork, beef and lamb are available online.
The U.S. Meat Export Federation (www.USMEF.org) is the trade association responsible for developing international markets for the U.S. red meat industry and is funded by USDA, exporting companies, and the beef, pork, corn and soybean checkoff programs.