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January exports of U.S. beef and pork were slightly below last year’s volume levels while export value posted mixed results, according to statistics released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

Beef exports slipped 1 percent year-over-year to 104,766 metric tons (mt), but value still increased 3 percent to $642.3 million. Export value per head of fed slaughter pulled back from the red-hot pace of 2018, averaging $284.86, down 3 percent from a year ago. January exports accounted for 12.2 percent of total beef production and 9.7 percent for muscle cuts only, down from 12.4 percent and 10.1 percent, respectively, in January 2018.

January pork exports were also down 1 percent from a year ago at 201,835 mt, with value dropping 9 percent to $494.1 million. Export value averaged $44.75 per head slaughtered, down 12 percent year-over-year. Exports accounted for 23.6 percent of total January pork production, down from 24.7 percent a year ago. For muscle cuts only the ratio was 20.3 percent, down from 21.5 percent.

Results for both beef and pork were bolstered by stronger variety meat volumes. Beef variety meat exports totaled 26,630 in January, up 7 percent from a year ago, valued at $81.8 million (up 19 percent). This was fueled by strong performances in Japan, the ASEAN region and Africa. Pork variety meat exports climbed 5 percent year-over-year to 41,143 mt, led by increases in Mexico, Japan, Central and South America and Taiwan. But value was still down 11 percent to $81 million, because exports to China, the leading market for U.S. pork variety meat, remain subject to China’s 50 percent retaliatory duties.

Japan, Korea set strong early pace for 2019 beef exports

January beef exports to leading market Japan increased 8 percent year-over-year to 25,925 mt, valued at $167 million (up 12 percent). Variety meat exports to Japan (mainly tongues) were especially strong, soaring by 36 percent in both volume (4,645 mt) and value ($31.4 million). January was the first full month in which competitors of U.S. beef received tariff relief in Japan under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) with the import duty rate dropping from 38.5 to 27.5 percent on Dec. 30, 2018. This gap will widen further on April 1, when the rate for CPTPP countries drops to 26.6 percent.

“It’s great to see Japan’s demand for U.S. beef increase in January despite these tariff rate changes for our major competitors,” noted Dan Halstrom, USMEF president and CEO. “But this disadvantage will become more and more pronounced over time, so negotiations toward a U.S.-Japan trade agreement cannot come soon enough. The playing field needs to be leveled as quickly as possible so that the U.S. industry can continue to capitalize on booming meat demand in Japan.”

Following a record-shattering year, beef exports to South Korea increased 4 percent in January to 17,900 mt, with value up 10 percent to $134.3 million. U.S. beef enjoys a tariff rate advantage under the Korea-U.S. Free Trade Agreement (KORUS), with the import duty rate declining from 40 to 18.7 percent since KORUS was implemented in 2012 (the rates for Australian and Canadian beef are 24 and 26.6 percent, respectively). U.S. beef is benefiting from several new trends in Korea, including mid-priced steak restaurants (also underway in Japan), inclusion of beef cuts such as chuckeye roll and short plate in meal kits sold at retail and through e-commerce, and demand for a wider range of U.S. beef cuts, such as brisket point, in Korean barbecue establishments.

Other January highlights for U.S. beef include:

  • Export volume to Mexico was steady with last year at 21,194, but value climbed 14 percent to $101.7 million. The results for beef muscle cuts were especially strong, increasing 16 percent in volume (12,532 mt) and 21 percent in value ($78.2 million).
  • Led by Indonesia and the Philippines, exports to the ASEAN region jumped 49 percent from a year ago in volume (4,644 mt) and 31 percent in value ($20.7 million). Variety meat exports more than doubled from a year ago to 1,941 mt (up 107 percent), with value up 85 percent to $3.8 million.
  • Strong growth in Costa Rica, Guatemala and Honduras drove beef exports to Central America up 39 percent to 1,508 mt, while value was up 36 percent to $8 million.
  • Exports to Taiwan were steady with last January at 4,215 mt, but value was down 12 percent to $36.8 million.
  • A slow month in Hong Kong partially offset growth in other markets, as exports fell by 36 percent in volume to 7,047 mt, while value was down 28 percent to $57.4 million.

Amid trade disputes, smaller markets step up demand for U.S. pork

Retaliatory duties continued to pressure U.S. pork exports to Mexico in January, with volume down 9 percent from a year ago to 66,293 mt. Export value absorbed an even harsher blow, dropping 28 percent to $96.1 million. While the U.S. is still Mexico’s main pork supplier, Canada’s January exports to Mexico were up 26 percent to 11,500 mt and EU exports increased 91 percent to 305 mt. Chile’s volume was steady at 690 mt.

Exports to China/Hong Kong also felt the sting of China’s retaliatory duties, dropping 16 percent from a year ago in volume (26,744 mt) and 32 percent in value ($53.2 million).

While Japan’s import duties on U.S. pork remain unchanged, CPTPP countries received tariff relief at the end of 2018 and will see another rate decrease on April 1. This likely contributed to the January decline in U.S. pork exports to Japan, which were down 6 percent from a year ago in volume (32,910 mt) and 8 percent in value ($135.2 million). Lower duty rates for European pork under the Japan-EU Economic Partnership Agreement (EPA) were implemented Feb. 1, so the EPA’s impact was not yet reflected in Japan’s January import data.

“Trade barriers in these large, mainstay markets are very unsettling for major customers of U.S. pork and are hurting the entire U.S. supply chain, so it is essential that they are addressed in a timely manner,” Halstrom explained. “On a positive note, the U.S. industry’s longstanding efforts to expand and diversify international destinations for U.S. pork have never been more important, and it is gratifying to see impressive growth in many of our emerging and developing markets.”

January highlights for U.S. pork include:

  • Led by continued record exports to Colombia and a surge in shipments to Chile, pork exports to South America increased 57 percent in volume (12,752 mt) and 61 percent in value ($31.3 million). Exports were also higher year-over-year to Ecuador and Uruguay.
  • Strong growth in Panama, Costa Rica and Guatemala moved exports to Central America 18 percent higher year-over-year in volume (7,271 mt) and 15 percent higher in value ($16.6 million).
  • Exports to the Dominican Republic remained on a roll, increasing 29 percent from a year ago in both volume (3,289 mt) and value ($7.2 million).
  • Growing exports to Canada (16,165 mt, +13 percent) indicate the U.S. is backfilling Canada’s product needs as more Canadian pork is bound for China, Japan and Mexico. Canadian pork production is not increasing, therefore Canada needs to import more U.S. pork to meet domestic demand. This situation will continue until retaliatory tariffs on U.S. pork exports to China and Mexico are removed and could intensify across other markets as China’s buying ramps up due to African swine fever.
  • Pork exports to both Australia and New Zealand were higher year-over-year in January, pushing results for Oceania up 22 percent in volume (9,272 mt) and 12 percent in value ($24.8 million).
  • Led by excellent growth in the Philippines and Singapore, exports to the ASEAN region were up 28 percent in volume (3,895 mt) and 25 percent in value ($9.9 million).
  • Strong demand in Taiwan pushed January exports to 2,561 mt (up 153 percent) valued at $4.9 million (up 70 percent). The results for pork muscle cuts were even more impressive, nearly tripling in volume (1,780 mt, up 196 percent) and climbing 149 percent in value to $3.8 million. Taiwan is importing less pork from the EU and Canada so U.S. pork is gaining market share, climbing from 9 percent in January 2018 to 19.5 percent this year.
  • Pork exports to Korea eased from the record-breaking pace of 2018 but remained strong at 18,491 mt, down 2 percent year-over-year, with value down 8 percent to $50 million.

Lamb exports trend higher in January

Muscle cut growth in the Caribbean and the United Arab Emirates, along with continued strong demand for variety meat in Mexico pushed January exports of U.S. lamb to 1,384 mt, up 87 percent from a year ago. Export value was $2.13 million, up 45 percent. For muscle cuts only, exports climbed 94 percent from a year ago in volume (244 mt) and 49 percent in value ($1.17 million).

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

Monthly charts for U.S. pork and beef exports are also available online.

Last year U.S. beef exports shattered the previous value record and achieved a new high for volume, according to year-end 2018 statistics released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Pork export volume came up just short of the record set in 2017 while value slipped 1 percent year-over-year. U.S. lamb exports rebounded from a down year in 2017, largely due to stronger variety meat demand in Mexico.

Fueled by tremendous demand in South Korea, Japan, Taiwan and the ASEAN region, U.S. beef exports reached 1.35 million metric tons (mt), up 7 percent from 2017 and exceeding the 2011 record by 5 percent. Export value soared to $8.33 billion, breaking the 2017 record by $1.06 billion – an increase of 15 percent. For December only, beef export volume was down slightly from a year ago to 112,777 mt, but value still increased 4 percent to $700.2 million.

Beef export value was also record-shattering on a per-head basis, averaging $323.14 per head of fed slaughter in 2018. This was a 13 percent increase over 2017 and exceeded the 2014 record by 8 percent. Beef exports accounted for 13.5 percent of total beef production in 2018 and 11.1 percent for muscle cuts, up from 12.9 percent and 10.4 percent, respectively, in 2017.

Despite significant headwinds, 2018 pork exports reached 2.44 million mt – just 0.5 percent below the 2017 record. Pork export value was $6.39 billion, down 1 percent year-over-year and the third-highest total on record, trailing only 2014 ($6.65 billion) and 2017 ($6.49 billion). For December only, pork exports were down 5 percent from a year ago to 209,780 mt, valued at $527.4 million (down 11 percent).

Pork export value averaged $51.37 per head slaughtered in 2018, down 4 percent year-over-year. Exports accounted for 25.7 percent of total pork production, down about one percentage point from 2017. The ratio was 22.5 percent when including only pork muscle cuts – up from 22.3 percent in 2017.

Korea accounts for half of the $1 billion surge in beef exports

While demand for U.S. beef showed remarkable strength throughout the world in 2018, no market exemplified this momentum more than South Korea. Exports to Korea increased 30 percent year-over-year in volume to 239,676 mt and jumped 43 percent in value to $1.75 billion – an increase of $526 million over the 2017 record and more than double the value total posted just three years ago. Chilled beef exports to Korea increased 19 percent to 53,823 mt and climbed 29 percent in value to a record $525 million, illustrating U.S. beef’s surging success in the Korean retail and foodservice sectors. U.S. beef accounted for 58 percent of Korea’s chilled beef imports in 2018.

“There may have been no greater ag trade success story in 2018 than U.S. beef exports to Korea,” said Dan Halstrom, USMEF president and CEO. “Less than a decade removed from street protests opposing the reopening of this market, Koreans now consume more U.S. beef per capita than any international destination. This is a testament to the U.S. beef industry’s strong commitment to the Korean market and the outstanding support received from the U.S. government – through both USDA promotional funding and the negotiation of the Korea-U.S. Free Trade Agreement (KORUS), which has dramatically lowered import duties on U.S. beef.”

Since KORUS was implemented in 2012, the import duty rate on U.S. beef has declined from 40 to 18.7 percent and will fall to zero by 2026. U.S. beef’s main competitors also have free trade agreements with Korea but currently face higher duty rates than the U.S., including Australia (24 percent), Canada (26.6 percent) and New Zealand (26.6 percent).

Other 2018 highlights for U.S. beef exports include:

  • Exports to leading market Japan increased 7 percent from a year ago in volume (330,217 mt) and 10 percent in value ($2.08 billion, topping $2 billion for the first time in the post-BSE era). The United States is Japan’s largest beef supplier by value and a close second to Australia in volume, but this position is tenuous due to a widening tariff rate gap between U.S. beef and its main competitors, all of which secured tariff rate relief under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
  • Taiwan’s demand for U.S. beef continued to surge in 2018, with exports increasing 33 percent in volume (59,694 mt) and 34 percent in value ($550 million) from the previous records set in 2017. Export value to Taiwan has doubled over the past five years, setting six consecutive records, and U.S. beef holds more than 75 percent of Taiwan’s chilled beef market – the largest share of any Asian destination.
  • While total beef exports to Mexico increased only slightly year-over-year in volume to 239,110 mt, beef muscle cuts achieved strong growth – climbing 7 percent to 142,514 mt. Total export value was up 8 percent to $1.06 billion, exceeding $1 billion for the first time since 2015. Muscle cut value increased 11 percent to $828.8 million.
  • Beef exports to China/Hong Kong softened in November and December and finished the year 3 percent lower in volume at 130,129 mt. However, export value still climbed 12 percent to $1.03 billion (marking the first time since 2014 that U.S. beef exports topped $1 billion in four separate markets). This included exports to China of 7,297 mt valued at $60.8 million. China reopened to U.S. beef in June 2017 after a 13-year absence, but U.S. beef has been heavily disadvantaged by the 25 percent retaliatory duty imposed by China last year, bringing the total tariff rate on U.S. beef to 37 percent. By comparison, Australian beef pays just 6 percent and New Zealand beef is duty-free, benefiting from free trade agreements with China.
  • Led by outstanding growth in the Philippines and Vietnam and larger shipments to Indonesia, beef exports to the ASEAN region increased 20 percent from a year ago in volume (49,226 mt) and 30 percent in value ($274.6 million).
  • Strong growth in Colombia kept beef exports to South America steady with the previous year’s volume at 28,333 mt, while value set a new record at $126.2 million (up 10 percent). Exports were also higher year-over-year to Peru but declined to Chile as Brazil and Argentina’s exports to Chile surged, benefiting from weaker currencies.
  • A strong performance in mainstay market Guatemala and significant growth in Costa Rica and Panama pushed beef exports to Central America to record highs in volume (14,739 mt, up 14 percent) and value ($80 million, up 11 percent).

Solid year for U.S. pork, but second-half exports pressured by retaliatory duties

Through May 2018, pork exports to leading volume market Mexico appeared to be headed for a seventh consecutive record, topping the 2017 pace by 6 percent. But May was the last month in which exports to Mexico would increase year-over-year, due to retaliatory duties imposed in response to U.S. tariffs on steel and aluminum imports. Export volume to Mexico held up relatively well, finishing the year at 777,143 mt – 3 percent below the 2017 record. But export value took a bigger hit, declining 13 percent to $1.31 billion – the lowest since 2015. The decline in value from June through December was 24 percent, totaling $218 million, underscoring the large degree to which U.S. producers and exporters bore the cost of Mexico’s 20 percent retaliatory duty.

“The U.S. pork industry understands the vital importance of the Mexican market, and with strong industry support USMEF has intensified its efforts to retain as much of this business as possible,” Halstrom said. “This includes enhanced outreach in every sector, from large processors, to regional supermarkets, to specialty retailers and restaurant chains. While these efforts have been successful, the decline in export value clearly shows the negative impact these retaliatory duties have imposed on the U.S. pork supply chain.”

Retaliatory duties also impacted pork exports to China/Hong Kong, which fell 29 percent in volume (351,774 mt) and 21 percent in value ($851.7 million) compared to 2017. This included a 30 percent decline in pork variety meat volume to 225,414 (China/Hong Kong is the largest destination for U.S. pork variety meat). The corresponding dramatic decreases in values for feet and picnic hocks, combined with lower ham and picnic values, mean that retaliatory tariffs in China and Mexico resulted in lost value of $11.75 per head (or $860 million) from June through December 2018.

On the positive side, U.S. pork exports to Korea were record-shattering in 2018, soaring 40 percent year-over-year in volume (242,372 mt) and 41 percent in value ($670.3 million). Export value topped the previous record, set in 2011, by 35 percent as U.S. pork capitalized on Koreans’ surging pork consumption. Most U.S. pork now enters Korea duty-free under KORUS, making pork products more affordable and accessible and a perfect fit for Korean’s convenience-driven demand. Korea’s imports of U.S. pork variety meat jumped by 62 percent in volume (15,525 mt) and 68 percent in value ($45.9 million) as items such as bungs and feet made impressive gains.

Other 2018 highlights for U.S. pork include:

  • Exports to leading value market Japan were steady with 2017 in both volume (394,300 mt) and value ($1.62 billion). But similar to beef, U.S. pork’s position as Japan’s leading pork supplier is threatened by implementation of CPTPP and the Japan-EU Economic Partnership Agreement. The United States is now the only major pork supplier that has not gained tariff relief in Japan, with the most immediate impact expected in Japan’s imports of ground seasoned pork and processed pork products.
  • Fueled by remarkable growth in Colombia and solid increases in Chile and Peru, pork exports to South America reached new heights in 2018, increasing 30 percent in volume (135,298 mt) and 23 percent in value ($328.8 million). While most U.S. pork entering South America is for further processing, the U.S. industry is increasingly making inroads into the region’s rapidly growing retail and foodservice sectors.
  • Pork exports to Central America were also record-large, increasing 16 percent in volume to 86,031 mt and 12 percent in value to $201.7 million. Exports increased to mainstay markets Honduras and Guatemala, but much of the region’s growth was achieved in Panama, El Salvador, Costa Rica and Nicaragua.
  • Australia is one of the top destinations for U.S. hams (outside of Mexico and China/Hong Kong), and strong demand for hams pushed pork exports to Australia up 13 percent from a year ago in volume (80,431 mt) and 9 percent in value ($227.3 million). The U.S. also gained significant market share, climbing from 40 to 46 percent of Australia’s pork imports. Exports to New Zealand also trended higher, climbing 10 percent in volume (7,897 mt) and 12 percent in value ($25.6 million).
  • Impressive growth in the Philippines and Vietnam pushed pork exports to the ASEAN region 43 percent higher in volume (68,326 mt) and 31 percent higher in value ($168.5 million). In a down year for U.S. pork variety meat, exports to the ASEAN were a notable bright spot – more than doubling from a year ago in both volume (28,619 mt, up 129 percent) and value ($45.6 million, up 107 percent).
  • Pork exports to the Dominican Republic continued to gain momentum in 2018, easily surpassing previous records for both volume (42,669 mt, up 39 percent) and value ($92.5 million, up 30 percent).

U.S. lamb export volume largest since 2012

Mexico’s strong demand for U.S. lamb variety meat fueled a rebound in 2018 lamb exports, with combined lamb/lamb variety meat shipments climbing 77 percent in volume to 12,866 mt, the largest since 2012. Export value increased 19 percent to $23.4 million, the highest since 2014. While this was primarily driven by larger variety meat exports, lamb muscle cuts also achieved promising growth in the Caribbean, the United Arab Emirates and the Philippines. Japan and Taiwan are also potentially strong destinations, having reopened to U.S. lamb in 2018 and 2016, respectively.

Complete 2018 export results for U.S. beef, pork and lamb are available from USMEF’s statistics Web page.

Monthly charts for U.S. pork and beef exports are also available online.

If you have questions, please contact Joe Schuele at jschuele@usmef.org or call 303-547-0030.

NOTES:

  • Export statistics refer to both muscle cuts and variety meat, unless otherwise noted.
  • One metric ton (mt) = 2,204.622 pounds.
  • U.S. pork currently faces retaliatory duties in China and Mexico. China’s duty rate on frozen pork muscle cuts and variety meat increased from 12 to 37 percent in April and from 37 to 62 percent in July. Mexico’s duty rate on pork muscle cuts increased from zero to 10 percent in June and jumped to 20 percent in July. Beginning in June, Mexico also imposed a 15 percent duty on sausages and a 20 percent duty on some prepared hams.
  • U.S. beef faces retaliatory duties in China and Canada. China’s duty rate on beef muscle cuts and variety meats increased from 12 to 37 percent in July. Canada’s 10 percent duty, which also took effect in July, applies to HS 160250 cooked/prepared beef products.