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June Results Confirm Strong First Half for U.S. Red Meat Exports

U.S. pork and beef exports continued to trend above year-ago levels in June, capping a very strong first half of the year. According to statistics released by USDA and compiled by USMEF, exports also achieved higher values on a per-head-slaughtered basis and accounted for a steady-to-higher percentage of total production.

June beef exports were the largest of 2017, reaching 109,554 metric tons (mt) – up 11 percent year-over-year and the largest June total since 2011. Export value increased 10 percent to $602.5 million. For January through June, beef exports were up 12 percent in volume (606,876 mt) and 15 percent in value ($3.35 billion) compared to the first half of last year.

Exports accounted for nearly 13 percent of total U.S. beef production in June and 10 percent for muscle cuts only – each about even with a year ago. The ratios were the same for January through June, which was also steady with the first half of last year. Export value per head of fed slaughter averaged $264.51 in June, up 6 percent from a year ago. Through June, per-head export value was up 8 percent to $269.21.

Pork exports totaled 200,229 mt in June, up 6 percent year-over-year and the largest June volume on record, valued at $527.1 million, up 4 percent. This pushed the first-half total to 1.25 million mt valued at $3.21 billion – up 13 percent and 16 percent, respectively.

Exports accounted for 27 percent of total pork production (up more than one percentage point from a year ago) in June and 22 percent for muscle cuts only (steady with last year). For the first half, with production at a record pace, both ratios increased significantly from a year ago. The percentage of total production jumped from 25.3 percent to 27.8 percent, and for muscle cuts the increase was from 21.4 percent to 23 percent. Export value per head slaughtered in June was up 1 percent to $53.41 and the first-half average increased 12 percent to $54.09.

“In this time of large red meat production, the upward trend in per-head export value and in the percentage of production exported is especially critical to the industry,” said USMEF President and CEO Philip Seng. “These metrics confirm that we’re not simply exporting more red meat because more is available – those exports are also generating excellent returns. It was also gratifying to see that the U.S. trade deficit narrowed in June due to an expansion of exports, knowing that the red meat industry made another solid contribution toward that effort.”

Chilled beef to Asia drives first-half growth, but exports increased to most destinations

Beef exports to leading market Japan continued to gain momentum in June, with volume up 7 percent to 27,521 mt and value up 13 percent to $174.4 million (the highest since 2000). First-half exports to Japan exceeded last year’s pace by 23 percent in volume (150,812 mt) and 28 percent in value ($905.8 million). This included a 40 percent increase in chilled beef exports to 70,807 mt, valued at $511 million (up 38 percent), as the U.S. captured more than 50 percent of the chilled beef market. While demand for U.S. beef is very strong in Japan’s retail and foodservice sectors, frozen exports to Japan face a higher tariff rate through March 2018. See more details on this issue online.

June exports to South Korea were the largest since January at 14,701 mt, up 14 percent from a year ago, valued at $92.4 million (up 20 percent and the highest of 2017). First-half exports to Korea were up 13 percent in volume (83,357 mt) and 21 percent in value ($527.7 million). The U.S. also captured more than 50 percent of Korea’s chilled beef market as chilled exports totaled 18,816 mt (up 83 percent year-over-year) valued at $166 million (up 86 percent).

Other first-half highlights for U.S. beef exports included:

  • Exports to Taiwan totaled 20,376 mt (up 19 percent from a year ago) valued at $179 million (up 26 percent). This included chilled beef exports of 8,178 mt (up 19 percent) valued at $93.5 million (up 22 percent) as the U.S. captured more than 70 percent of Taiwan’s chilled beef market.
  • After a slow start to the year, exports to Hong Kong rebounded to post double-digit first-half gains in both volume (56,846, up 11 percent) and value ($357.4 million, up 17 percent).
  • Exports to Mexico increased 3 percent in volume (114,923 mt) while slipping 3 percent in value ($459.7 million). But muscle cut exports to Mexico – mainly shoulder clods, rounds and other end cuts – fared better, increasing 9 percent in volume (61,782 mt) and 2 percent in value ($353.8 million).
  • Led by a doubling of exports to Vietnam and Indonesia and strong demand in the Philippines, exports to the ASEAN region increased 85 percent in volume (20,532) and 61 percent in value to $99 million.
  • Fueled by strong growth in Chile, Guatemala and Colombia, exports to Central and South America increased 11 percent in volume (19,137 mt) and 5 percent in value ($83.8 million). Exports to Brazil, which began in late April, totaled 412 mt of muscle cuts and 651 mt of variety meat at a combined value of $2.6 million.
  • After reopening in 2016, South Africa quickly emerged as the fourth-largest destination for U.S. beef variety meat, with first-half exports (mainly livers) reaching 7,849 mt – an increase of nearly 500 percent from a year ago – valued at $6 million.

First-half pork export growth led by Mexico, Korea, South America

Pork exports to leading volume market Mexico remained on a record pace in June, increasing 19 percent year-over-year in both volume (64,712 mt) and value ($124.9 million). This pushed the first-half total to 398,565 mt (up 23 percent) valued at $731.6 million (up 29 percent). A major factor behind this increase is that Mexican consumers are eating significantly more pork, both imported and domestic. Over the past 10 years, Mexico’s annual per-capita pork consumption has increased by about one third, and is expected to reach 18 kilograms this year (carcass weight equivalent), based on USDA estimates. Over the same period, Mexico’s pork production has increased by 30 percent.

June exports to leading value destination Japan were below year ago levels, dipping by 8 percent in volume (30,401 mt) and 10 percent in value ($124.3 million). But first-half totals remained higher than a year ago at 200,175 mt (up 4 percent) valued at $810.6 million (up 8 percent). Chilled pork exports to Japan declined 2 percent to 107,032 mt, but value increased 5 percent to $501 million. The U.S. holds 55 percent of the chilled pork market in Japan and continues to face growing competition from Canadian pork.

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Other first-half highlights for U.S. pork exports included:

  • Capitalizing on rapid growth in home meal replacement items and other foods that emphasize convenience, as well as duty-free status for most cuts under the Korea-U.S. Free Trade Agreement, pork exports to South Korea climbed 31 percent from a year ago to 94,545 mt, valued at $258.5 million (up 38 percent). With a strong second half, exports to Korea could exceed the record set in 2011, when Korea was facing a domestic pork shortage due to foot-and-mouth disease. This year Korea’s imports have been driven by strong consumer demand, as Korea’s domestic pork production is slightly ahead of last year’s pace.
  • While exports to China/Hong Kong fell below last year’s pace in volume (271,297 mt), value still increased 3 percent ($558.4 million). This reflected the strong price commanded for pork variety meat, as first-half variety meat exports to the region climbed 19 percent in volume (172,269 mt) and 28 percent in value ($367.2 million).
  • Led by exceptional growth in Colombia and Chile, pork exports to Central and South America were up 51 percent in volume (81,930 mt) and 56 percent in value ($200.3 million). Exports also doubled to Peru and solid increases were achieved in Honduras, Panama, Nicaragua and El Salvador.
  • Strong growth in the Dominican Republic pushed pork exports to the Caribbean up 36 percent in volume (26,984 mt) and 35 percent in value ($63.7 million). Exports also increased to the Bahamas, Trinidad and Tobago, Haiti and Barbados.
  • Larger shipments to the Philippines and Singapore helped drive exports to the ASEAN region up 20 percent in volume (23,207 mt) and 28 percent in value ($59 million).
  • Led by the above-mentioned success in China/Hong Kong, pork variety meat exports achieved exceptional growth in the first half, increasing 19 percent year-over-year in volume (286,787 mt) and 32 percent in value ($580.3 million). Additional markets contributing to this growth included Mexico, Canada, Chile, Colombia and the Philippines. Variety meat export value averaged $9.78 per head slaughtered in the first half, up $2.10 from a year ago.

Lamb exports continue to show improvement

U.S. lamb exports exceeded year-ago levels for the second straight month in June, reaching 642 mt (up 40 percent) valued at $1.75 million (up 58 percent). First-half lamb exports were still down 13 percent from a year ago in volume (3,755 mt) but increased 10 percent in value to $9.6 million. For lamb muscle cuts only, first-half exports were up 20 percent in both volume (1,079 mt) and value ($6.6 million) including year-over-year growth to Mexico, the Caribbean, Central America and Taiwan.

Complete June export results for U.S. beef, pork and lamb are available from USMEF’s statistics web page.

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.