Strong May Results for U.S. Beef, Pork Exports

U.S. red meat exports gained momentum in May with shipments of both beef and pork increasing significantly year-over-year and reaching 2016 highs, according to statistics released by USDA and compiled by USMEF.

May beef export volume increased 12 percent from a year ago to 99,451 metric tons (mt). Export value ($533.3 million) was 4 percent lower than a year ago but still the highest since July 2015. For January through May, export volume moved 3 percent ahead of last year’s pace at 442,627 mt, while value was down 11 percent to $2.37 billion.

Exports accounted for 14 percent of total beef production in May and 11 percent for muscle cuts only – each up about 1 percentage point from a year ago. For January through May, these ratios were 13 percent and 10 percent, respectively, steady with last year’s pace. Export value per head of fed slaughter was $264.98 in May and $249.67 for January through May – down 9 percent and 14 percent, respectively, from a year ago.

Pork exports reached 199,193 mt in May, up 8 percent from a year ago, while export value increased 3 percent to $501.7 million. Both totals were the highest since April 2015. For January through May, pork export volume was 1 percent ahead of last year’s pace at 921,838 mt, valued at $2.27 billion – down 6 percent.

Exports accounted for 28 percent of total pork production in May and 24 percent for muscle cuts only – up slightly from a year ago. For January through May, these ratios were 25 percent and 21 percent, respectively, which was steady with last year. Export value per head slaughtered was $54.66 in May (down 2 percent from a year ago) and $47.44 for January through May (down 8 percent).

Japan, Korea, Mexico drive beef export growth

May beef exports to Japan were the largest since September 2014 at 23,158 mt, up 29 percent from a year ago, while value climbed 22 percent to $130.1 million. For January through May, exports were 8 percent higher in volume (96,480 mt) and down 2 percent in value ($552.8 million).

Exports to South Korea reached 15,471 mt in May, up 59 percent from a year ago and the largest in more than five years. Through the first five months of 2016, exports to Korea totaled 61,062 mt (up 26 percent from a year ago) valued at $359.7 million (up 5 percent).

“With domestic beef supplies being very tight in both Japan and Korea, our spring marketing campaigns have focused on presenting U.S. beef as a high-quality, reasonably priced alternative,” said USMEF President and CEO Philip Seng. “For example, USMEF-Japan’s training and support programs highlighting new merchandising techniques and cooking styles, including ‘Thick Cut American Beef’ and ‘American BBQ’ have greatly expanded sales of U.S. beef in regional supermarket chains, displacing domestic product as well as foreign competition. These regional retailers continue to work with USMEF in adding more beef cuts and utilizing new merchandising ideas, which is helping the U.S. industry win back market share in Japan.”

Despite the continued weakness of the peso, beef exports to Mexico gained momentum in May, increasing 33 percent from a year ago in volume (22,363 mt) and 13 percent in value ($90.4 million). Through May, 2016 exports to Mexico totaled 91,813 mt (up 1 percent) valued at $399.3 million (down 11 percent).

“From a price standpoint, the Mexican beef market is certainly one of our most challenging,” Seng said. “But with U.S. beef prices moderating in recent months, this creates excellent opportunities to win back customers – especially by promoting economically priced alternative cuts, which add quality and variety to restaurant menus and have also gained traction in the retail sector.”

China’s demand for U.S. pork remained strong through May; momentum also builds in other key markets

May pork exports to China/Hong Kong were the largest since 2011 and the third-largest on record at 58,007 mt, up 85 percent from a year ago, while value climbed 87 percent to $111.1 million. Through May, 2016 exports to China/Hong Kong totaled 234,526 mt (up 80 percent from a year ago) valued at $441.7 million (up 61 percent).

“The U.S. industry, as well as the other major pork exporters, has certainly benefited from the shortfall in China’s domestic production,” Seng noted. “However, falling hog prices in China suggest that demand for imported pork could begin to cool, so it was vitally important that exports to other key markets also gained momentum in May. USMEF is redoubling efforts to educate processors and other end users in China on the attributes of U.S. pork, so they fully understand the value U.S. pork delivers even after China’s domestic production rebounds.”

Although outpaced by China/Hong Kong in May, Mexico usually ranks as the leading volume destination for U.S. pork. May exports to Mexico were the largest in six months at 57,050, up 7 percent from a year ago, while value increased 10 percent to $104.7 million. For January through May, exports still trailed last year’s record pace by 7 percent in volume (270,410 mt) and 9 percent in value ($460.6 million).

Other markets in which U.S. pork posted strong performances in May included Australia, the Philippines and Honduras. These results pushed January-May exports to Australia to 26,985 mt, up 12 percent from a year ago, while value was down 7 percent to $72.6 million. In the Philippines, exports were still down 2 percent in volume (12,541 mt) through May, but value increased 5 percent to $26.6 million. Exports to Honduras surged to 10,618 mt, up 27 percent from the same period last year, while value increased 7 percent to $19 million.

January-May exports to Japan were down 15 percent from a year ago in volume (159,983 mt) and dipped 13 percent in value ($611.5 million). The decline was in frozen exports (59,399 mt, down 42 percent), while exports of chilled U.S. pork to Japan (89,592 mt, up 16 percent) are on a record pace in 2016.

“The primary focus of our promotional efforts in Japan is on chilled cuts, which is where the U.S. industry can derive the strongest returns in this highly competitive market,” Seng explained. “We are particularly focused on educating retailers, who are focused on quality, about the positive attributes of chilled U.S. pork versus the competition. USMEF’s spring promotional campaigns involved thousands of retail outlets, from both national and regional chains, and in many cases sales of U.S. chilled pork more than doubled as a result.”

Pork exports to Korea were down significantly from last year’s large totals, with January-May volume dropping 35 percent to 62,078 mt and value down 44 percent to $158.9 million. But U.S. pork has actually gained market share in Korea this year, with imports from all suppliers slowing as Korea’s domestic pork production rebounds from outbreaks of foot-and-mouth disease and porcine epidemic diarrhea virus.

Lamb exports lower in May, but volume still ahead of last year

U.S. lamb exports in May were sharply lower than a year ago in volume (558 mt, down 38 percent), though value fell just 7 percent to $1.6 million. Through the first five months of 2016, lamb export volume increased 5 percent from a year ago to 3,873 mt, while value was down 8 percent to $7.6 million. Exports to Bermuda continued to perform well in May and U.S. lamb posted its first exports to Taiwan since 2003, following reopening of the market in late April.

Complete January-May export results for U.S. beef, pork and lamb are available from USMEF’s statistics web page. Monthly charts for U.S. beef and pork export volumes are also available online.

If you have questions, please contact Joe Schuele at jschuele@usmef.org or call 303-226-7309.

NOTES:

• Export statistics refer to both muscle cuts and variety meat, unless otherwise noted.
• One metric ton (mt) = 2,204.622 pounds.