January 1, 2018

By Scott Brown
Not only the quantity but also the value of U.S. beef exports is likely to set a new record high in 2017. This is no small achievement given that cattle and beef prices have retreated significantly in the last two or three years.
With trade data currently available for the first 10 months of 2017, Japan and South Korea are the top two markets for U.S. beef, accounting for a combined 46.1% of export quantity and 42.5% of export value. Both of these markets have also recorded strong growth in the unit value of U.S. beef exports through October, with Korea’s value per metric ton up 11.9% and Japan up 6.6% relative to a year ago. This compares to U.S. wholesale boxed beef values, which are up less than 1% for both Choice and Select product for the first 10 months of the year, and Prime boxed beef values, which are only 3.2% higher.
Quality trending higher
While it is difficult to pinpoint the exact quality composition of beef heading to each of our trading partners, these rising export values would seem to suggest that the same trend of increased demand for higher-quality beef cuts that is occurring in the U.S. market may be playing out overseas as well.
In the last two years, the Prime boxed beef cutout has only lost 11% of its value as beef supplies have risen, compared to a 14.3% drop in Choice and a 15.7% decline in Select beef. U.S. beef export values have fallen least of all, however, only down 8.3%.
As China increases purchases of U.S. beef in coming years, export values could receive another boost. Though China has only accounted for 0.2% of the year to date of beef export quantity, the average value of beef shipped to China is well above that for any of our top five markets. There is great potential for high-quality U.S. beef to continue to increase its market presence in China and help to raise the total beef export unit value.
Securing food supply markets
Though the U.S. cattle and beef industries have benefited from the expansion in trade value (beef export value alone is on pace to top $6 billion this year), it has also placed more emphasis on the increasing risk that the industry faces should these markets be lost for a period of time.
The Senate Agriculture Committee recently held a hearing on securing the U.S. food supply and being prepared for bioweapons that could be used in a terror attack against U.S. food production. A new National and Agro-Defense Facility are under construction at Kansas State University to upgrade preparedness for purposeful attacks against our food system, as well as animal disease outbreaks. It is a wise use of resources to protect what continues to be an increasingly valuable piece of U.S. agriculture.
Brown is a livestock economist with the University of Missouri. He grew up on a diversified farm in northwest Missouri.
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