While U.S. pork exports for the first 11 months of 2012 continued to exceed the record-setting pace of 2011, the value of beef exports remained slightly above 2011’s record levels despite continued lower volumes, according to statistics released by USDA and compiled by the U.S. Meat Export Federation (USMEF). In their latest analysis of export data, USMEF pointed out that while volumes have trended lower throughout the year, strong prices for U.S. beef have kept the overall value of U.S. beef exports at a strong level.
With U.S. production declining in 2012, beef exports fell a modest 1% in value on a 13.3% drop in volume in November. For the year, volumes are down 11% (1,043,151 metric tons) but the value of those exports is $5.05 billion – still 2% above the record-setting value pace of 2011.
Canada (up 18.5% in volume and 37.8% in value), Hong Kong (up 18.8% and 62.6% in volume and value, respectively), Russia (up 19% in volume and 4% in value) and Central/South America (up 42.4% in volume and 56.3% in value; including record exports to Chile, up 119%) were the top-performing beef export markets in November. Export value to South Korea increased nearly 6% on a slight decline in volume.
“Volume has been an issue for beef exports all year,” noted USMEF President and CEO Philip Seng. “That continued in November, but an appreciated value of those products has helped the industry hold its own in a challenging year.”
Beef exports to price-sensitive markets like Mexico are down this year, but the value of exports to premium markets like Japan (up 19% for the year) and Canada (up 13%) continue to grow even as volumes remain low.
Another positive for beef exporters is the rebound of the Taiwan market, which was once a top five U.S. beef export market but was hindered for most of this year by ractopamine-related barriers that have since been resolved. In November, the value of beef sales to Taiwan jumped 13.7% over last year on slightly reduced volumes. For the year, exports to Taiwan are down 48% in volume and 40% in value, but recent numbers are encouraging for 2013. Pork exports to Taiwan, however, continue to be affected by Taiwanese restrictions on products with ractopamine residues.
“There is no question that rising production costs and slowing economic growth have kept buyers on the sidelines or moved them toward less expensive options,” said Seng. He noted that higher domestic meat production in certain markets (such as Korea, Japan and China) also have affected exports this year. Market access issues – such as Indonesia’s tighter import quotas aimed at boosting domestic production and Saudi Arabia’s closure due to BSE – have also impacted exports.
“While volumes are lower, the quality and reputation of U.S. red meat products have helped support higher values, and that is not a statement that most of our competitors in the international marketplace can make,” he said.
In case you missed it last week, I discussed the looming "container cliff" with Seng in an episode of my podcast Feedstuffs In Focus over at Feedstuffs.com. The potential for a longshoremen's strike could have disastrous effects on the U.S. economy at large, and the meat export market in specific.
Almost nothing has been reported publically from the negotiations since the Dec. 28 statement from the union that negotiations would continue until at least Feb. 1, but time is obviously running short.