Exports Strong
U.S. pork, beef exports post solid gains in May.
Author's Note: Unless otherwise indicated, exports include both muscle cuts and variety meat
U.S. pork and beef exports continued their strong 2010 performance in May, collectively growing 25% in value vs. 2009 and 8% over April 2010, according to statistics released by USDA and compiled by the U.S. Meat Export Federation (USMEF). At $769.5 million, U.S. red meat exports reached their highest monthly value since October 2008.
For producers, the gain in export value per animal processed in May was impressive: $53.10 per animal on the pork side — nearly 30% higher than the $40.90 recorded in May 2009. For beef, export value equated to $160.30 per steer and heifer slaughtered compared to $122 at this time last year — an increase of about 31%.
May pork export value increased 22% over a year ago and 5% from April 2010, reaching $419.3 million. Export volume of 162,865 metric tons [359 million pounds (lb.)] was up 13% over last year and 4% from the previous month.
The pork industry is seeing a higher return per pound on its exports in 2010. The value of those exports hit $1.9 billion for the first five months of 2010, a 5% increase over last year. At the same time, the volume of exports this year is 787,869 metric tons (1.7 billion lb.), essentially even with last year's pace.
Pork muscle cut exports are up 4% in volume and 9% in value over last year, while variety meat exports are down 13% and 14%, respectively.
The beef side
On the beef side, exports are running stronger than last year in virtually all major markets except Mexico. Global exports of 90,930 metric tons (200 million lb.) valued at $349 million were 12% higher in volume and 25% higher in value than in May 2009. This pushed the cumulative 2010 results to 398,879 metric tons (more than 879 million lb.) valued at $1.5 billion — an increase of 11% in volume and 19% in value over last year's pace.
Beef muscle cuts are performing even more impressively, increasing 25% in volume and 29% in value over January through May 2009. Similar to what the pork industry is seeing in variety meat, beef variety meat exports are down 12% and 21%, respectively.
"The recognition of the quality and value of U.S. beef, pork and lamb is growing in the international markets," said USMEF President and CEO Philip Seng. "The feedback we receive from both buyers and consumers tells us that even with the gains we are seeing, there are opportunities for continued export growth in key segments and niches of even the most well-developed markets, like Japan and South Korea."
Critical to producer bottom lines
USMEF Chairman Jim Peterson, a rancher from Buffalo, Mont., added that gaining and maintaining access to key markets such as Russia and China are critically important to the bottom line of U.S. producers.
"The value of exports per head we saw in May — more than $53 per head in pork and $160 per head in beef — is a vivid illustration of how important it is for producers to put resources into our key export markets," Peterson said. "The bulk of the growth in sales and profitability that our industry can expect in the future will come from the international marketplace, and USMEF is working hard to ensure that growth is achieved."
May pork exports solid worldwide, with boost
from
resumption of Russia, China trade
Though well below last year's pace, the recent resumption of exports to Russia and China have begun to have a positive impact on the global results for U.S. pork. Exports to Russia are still around 50% below the first five months of 2009 in both volume (24,386 metric tons or 53.8 million lb.) and value ($55 million). But May results showed significant progress as exports returned to 88% of the volume and 97% of the value achieved in May 2009. The picture is similar in China, where the cumulative 2010 total is still quite small, but May exports were down only 15% from one year ago, and the value ($10.2 million) was actually 31% higher. (It was in late May 2009 when China effectively closed to U.S. pork due to A-H1N1 influenza.)
Mexico continues to be the largest-volume destination for U.S. pork, increasing 7% in volume (225,672 metric tons or 497.5 million lb.) and 27% in value ($401.5 million) over the record pace established in 2009. May exports slowed slightly compared to the previous month, however, due in part to record-high ham prices.
Exports to Japan, by far the largest foreign market for U.S. pork in terms of value, remain below last year's pace but are showing signs of recovery from the slump encountered in early 2010. May exports exceeded the year-ago level by 18% in both volume and value, raising the cumulative total to 180,326 metric tons (397.5 million lb.) valued at $671.2 million. For the year, pork exports to Japan remain down 6% in volume and 3% in value from 2009. Muscle cut exports to Japan are within 4% in volume and 2% in value of their 2009 pace, but variety meat exports are down by about one-third.
Pork exports to Hong Kong continued their strong momentum in May, with the cumulative 2010 total reaching 95,686 metric tons (nearly 211 million lb.) valued at $135.2 million — an increase of 40% in volume and 24% in value. Hong Kong is a considerable bright spot for pork variety meat, with exports up 56% in volume and 44% in value. Muscle cut exports to Hong Kong also have increased in both volume (23%) and value (11%) over the first five months of 2009.
Other market highlights include:
• Exports to Canada are up 15% in volume (73,810 metric tons or 162.7 million lb.) and 25% in value ($246.5 million) over January to May 2009. Through June, live hog imports from Canada were 16% smaller than last year at 2.79 million head. This is roughly one quarter of Canadian hog slaughter, compared to about 30% over the same period last year.
• The Philippines has emerged as a tremendous growth market for U.S. pork, with volume nearly doubling over last year (to 29,227 metric tons or 64.4 million lb.) and value increasing by 119% to more than $55 million. Despite a slowdown in Vietnam, exports to the ASEAN region have increased 57% in volume and 73% in value compared to the start of 2009.
• May exports to Central and South America were down slightly from April, but the cumulative total increased 42% in volume (25,264 metric tons or 55.7 million pounds) and 46% in value (to $56.4 million) over last year. The top markets of Honduras, Guatemala and Colombia all achieved significant growth.
After a strong showing in April, pork exports to South Korea slowed again in May as the yearly total fell about 25% below last year's pace. Monthly exports were about even in volume with May 2009, and actually exceeded their year-ago value by about 10%. Exports in May 2009, however, were unusually low due to the A-H1N1 influenza scare. When compared to May 2008, exports to Korea were down by about one-third.
One factor behind this decline has been the rising price of U.S. picnics, a mainstay export item to Korea. Picnics are primarily used in processing, so they tend to be price-sensitive. Korea's domestic pork production is up about 8% over last year, resulting in a drop in prices of more than 10%. The United States is still the largest foreign supplier of pork to Korea, but Chile has emerged as a top competitor. Chilean pork faces lower tariffs in Korea due to recent implementation of a bilateral free trade agreement.
"Despite some challenges in Korea, we're seeing strong results for U.S. pork in most of our key destinations," Seng said. "Mexico has proven to be very resilient to rising pork prices, as have many of our Asian markets. Rising prices can sometimes create issues in these markets, but so far consumers are clearly willing to pay for the quality delivered by U.S. pork. In the one market where price seems to be a hindrance, we're being undersold in part because of an imbalance in tariff rates."
Beef exports continue to surge overseas, but still struggling in Mexico
Beef exports to all key Asian markets grew significantly over last year, with exports also on the rise in critical regions such as the Middle East, Russia, Europe and the Caribbean. Exports to Canada are also up for the year by 6% in volume and 9% in value, though May exports to Canada were below last year's level.
Mexico is still the No. 1 market for U.S. beef in terms of both volume and value, but it has not enjoyed the rebound achieved so far this year in all other major markets. Exports to Mexico are down 26% in both volume (95,802 metric tons or 211 million lb.) and value ($310 million) compared to January-May 2009. Muscle cut exports to Mexico have fared better — down 9% in volume and 7% in value. But variety meat exports continue to struggle, falling 45% in volume and 60% in value from last year.
The outlook is much brighter in other key markets. Korea, for example, overtook Japan and Egypt to become the No. 3 volume market for U.S. beef, increasing 66% over January through May of last year to 37,117 metric tons (81.8 million lb.). Korea is fourth-largest in terms of value (behind Mexico, Canada and Japan) at $162.8 million — an increase of 94% over last year. In May, beef exports to Korea were more than three times the volume and nearly four times the value seen in May 2009.
Export growth to Japan also has been impressive, with volume reaching 36,698 metric tons (80.9 million lb.) valued at $193.25 million for the first five months of 2010. This is an increase of 26% in volume and 27% in value over last year's pace. May export totals were up about 7% in volume and 10% in value over May 2009.
Beef exports to Russia have nearly tripled in volume (26,048 metric tons or 57.4 million lb.) over last year, while rising nearly 700% in value (to $70.4 million). This reflects a growing appetite in Russia for U.S. beef muscle cuts, whereas last year's exports were almost exclusively limited to variety meat. But even as muscle cut exports to Russia have exploded, variety meat exports are still up by 49% in volume and 178% in value over last year.
Other market highlights include:
• Exports to Hong Kong are nearly double last year's volume (10,731 metric tons or 23.7 million lb.) and increased 124% in value to $42.1 million. May exports were actually lower in volume than May 2009, but still rose in value by about 4%.
• Exports to Vietnam rebounded nicely in May, exceeding the May 2009 volume by 43% and nearly doubling in value. For the year, exports to Vietnam are 6% higher in volume (29,122 metric tons or 64.2 million lb.) and 18% higher in value ($104.5 million).
• Other markets in the ASEAN region are also growing impressively, including the Philippines and Indonesia, which are key markets for beef variety meat.
•Taiwan's activity slowed in May, but beef exports to Taiwan are still up 43% in volume (14,139 metric tons or 31.2 million lb.) and 52% in value ($72.9 million) over January through May 2009.
The Middle East continues to show excellent growth for beef muscle cuts, while remaining a key region for variety meat exports as well. Egypt leads the way in both categories, with total beef exports to Egypt rising 20% in volume and 42% in value over last year.
Region-wide, exports to the Middle East are up 25% in volume (45,028 metric tons or 99.3 million lb.) and 45% in value (to $78.6 million).
Exports to the Caribbean are up about 30% in both volume and value over last year, with Jamaica, the Dominican Republic and Bahamas ranking as the top three individual markets. The Netherlands Antilles has emerged as a growth market for muscle cuts, while Trinidad and Tobago is now second only to Jamaica in variety meat purchases.
Duty-free status is providing a boost for U.S. beef in the European Union, as USDA data show growth of 46% in volume and 69% in value over the first five months of last year. EU import data, however, is considered a more reliable measurement of export activity to this unique market, showing growth in the range of 60%, with the U.S. now accounting for 9% of the EU's chilled beef imports (up from 5% last year).
"The rebound in beef demand in Asia and in other key regions has provided a much-needed boost to the U.S. beef industry," Seng said. "While we are still working to rebuild demand in Mexico, the growth in our other key markets is steady and we expect this momentum to continue in the second half of the year."
Lamb exports still up in volume, with value pulling ahead of last year's pace
U.S. lamb export volume is 25% ahead of last year, with value up 1%. May was a strong month in both categories, as export volume exceeded May 2009 by 30% and export value was up 19%. Exports to Mexico have surged by 127% in volume and 160% in value compared to last year, while exports to the Caribbean and Canada are lower.
Complete pork, beef and lamb export statistics are available online at www.usmef.org.