16 December 2010

6 minute read

North America

Beef exports achieved their second-highest value of the year at $375.3 million (trailing only June’s $377.6 million), surpassing the September total by 11 per cent and beating October 2009 by an impressive 37 per cent.

Pork export value was third-highest of the year at $407.8 million - trailing only May ($419.3 million) and June ($425.3 million). The October value total was 7 per cent higher than September and 9 per cent higher than October 2009.

Beef export value ahead of 2003’s record pace

The strong showing in October pushed 2010 beef export value to $3.28 billion, surpassing the January-October 2003 total of $3.26 billion. Beef export value finished 2003 with an all-time, single-year record total of $3.86 billion. Compared to 2009, beef export value is up by 28 per cent. In terms of volume, beef exports reached 863,046 metric tons for the year, outpacing 2009 by 16 per cent. This year’s ratio of total US production exported is 11.4 per cent, while the value per steer and heifer slaughtered is $147.62. (The per head value in October actually reached $170.00 – nearly $50.00 higher than October 2009.)

“With two months of results still to come, we anticipate the possibility of setting a new export value record this year,” said USMEF President and CEO Philip Seng. “But the long climb back from the BSE setback of 2003 is not just about rebuilding our mainstay markets. We’ve established a presence for US beef in many new and diverse destinations across the globe in order to get back to this level. So now the key is to achieve full restoration of all markets so we can take US beef to even greater heights.”

US beef has achieved a significant increase in virtually every major destination except for Mexico this year, and even that market is improving. While exports to Mexico are down for the year, October totals were up 5 per cent in volume (22,194 metric tons) and 10 per cent in value ($71.9 million) over October 2009.

Exports to Canada are up only slightly in volume this year (123,549 metric tons) but have surged by 10 per cent in value to $589 million. Japan is up 31 per cent in both volume (103,057 metric tons) and value ($528.5 million). Korea remains in fourth place but has achieved exceptional growth this year, jumping 125 per cent in volume (90,640 metric tons) and 168 per cent in value to $422.3 million.

“The turnaround for US beef in Korea has been remarkable, and USMEF remains committed to sustaining the momentum with aggressive marketing efforts, including the recent launch of phase two of the ‘Trust’ imaging campaign,” Mr Seng said. “Having regained a high level of consumer confidence, we are now able to emphasize the quality and enjoyment US beef delivers, rather than focus solely on safety. While safety remains a key point with Korean consumers, we’re now better able to differentiate US beef for its flavor and consistency – which is what really appeals to buyers.”

Other markets achieving strong growth in 2010 include Russia, where exports have more than doubled in volume (49,766 metric tons) and quadrupled in value to $134.3 million. This reflects a nearly 700 per cent surge in muscle cut exports to Russia, valued at $95.3 million. Exports to Taiwan have eclipsed the previous record, reaching 31,522 metric tons valued at $172.4 million. This is an increase of 42 per cent in volume and 51 per cent in value over 2009. Exports to Hong Kong are also up sharply this year – 53 per cent in volume (28,735 metric tons) and 70 per cent in value ($109.2 million).

The Middle East has emerged as a region of tremendous growth for US beef, increasing by 28 per cent in volume (104,732 metric tons) and 65 per cent in value to $200 million. Like Russia, this sharp increase in value reflects a strong surge in muscle cut demand, though the region remains a top destination for beef variety meat. Exports to the ASEAN region are up 10 per cent in volume (57,321 metric tons) and 16 per cent in value to $187.4 million, despite a down year for exports to Viet Nam. Strong growth in Indonesia and the Philippines has fueled the ASEAN region’s solid performance.

Pork exports post solid increases in several key markets

Pork exports are up only 2 per cent in volume over 2009 to 1.39 million metric tons but have posted a 9 per cent increase in value to $3.49 billion. For the first 10 months of the year, this puts US pork exports just 3.5 per cent behind the all-time record pace of 2008 for export value. The ratio of total US production exported is 23.5 per cent, while the value per hog slaughtered is $43.47.

“When we shattered all pork export records in 2008, most analysts estimated that we could not get back to that same level for several years,” Mr Seng said. “But despite ongoing market access issues and some trade barriers that have recently surfaced, the US industry is mounting a challenge to the 2008 record. We’re looking at a solid finish to 2010.”

Mexico, the largest volume market for US pork, has already broken the single-year value record ($762.3 million) it set last year. With 437,615 metric tons valued at $795.3 million, exports to Mexico have exceeded last year’s record pace by 7 per cent in volume and 31 per cent in value. But exports to Mexico have been hampered the past few months by a retaliatory 5 per cent tariff imposed as a result of the NAFTA trucking dispute.

“While USMEF is pleased with the market penetration we have achieved in Mexico and the new opportunities we have developed, we can’t take this success for granted,” Mr Seng said. “This market is more critical to us than ever, and we need to keep working to resolve this trade impasse.”

US pork is posting another positive year in Japan, reaching 358,578 metric tons valued at more than $1.35 billion. This is up only slightly in volume over last year, but 4 per cent higher in value. With a strong finish to 2010, exports to Japan could reach $1.5 billion for the third consecutive calendar year.

Exports to Canada have been very strong in 2010, reaching 149,123 metric tons valued at $511.8 million. This is an 8 per cent increase in volume and a 21 per cent increase in value over last year. The ASEAN region is also performing very well – up 28 per cent in volume (57,141 metric tons) and 42 per cent in value ($115 million). This region is led by a very strong performance from the Philippines and Singapore. Intense USMEF marketing efforts in Central America are also paying significant dividends, as the Central/South America region is up 35 per cent in volume (47,343 metric tons) and 41 per cent in volume ($112.1 million). Honduras and Guatemala are the leading markets in Central America, while Colombia is the pacesetter in South America.

The only markets performing below last year are Korea (where domestic pork prices have been unusually low), Hong Kong, Taiwan and Russia. Exports to Russia got off to an exceptionally slow start in 2010 due to lack of market access for a large number of US plants. That recovery is still not complete, but the situation is showing signs of improvement. Taiwan’s zero tolerance for ractopamine residue is often cited as a reason for slowing activity by US exporters.