13 May 2011

10 minute read

North America

On a per-head basis, both pork and beef exports achieved record value levels. The US exported 29.4 per cent of total pork production with a per-head equivalent value of $56.52. The beef industry exported 15 per cent of total production with an export value per head of fed slaughter reaching $205.40.

For the first three months of 2011, beef exports are up 32 per cent in volume and 53 per cent in value while pork exports are up 18 per cent in volume and 25 per cent in value compared to the first quarter of 2010.

“We are seeing rebounding global demand for high-quality US red meat products, particularly as consumer trust recovers in key markets like Japan and South Korea,” said Philip Seng, USMEF president and CEO. “Certainly, we still are facing obstacles in the international marketplace, such as China’s ban on US beef, Mexico’s NAFTA-related tariff on US pork, technical issues in Taiwan and age restrictions on beef exports to Japan, but even without the resolution of any significant access issues, we’re finding increased opportunities to expand market share for US red meat products.”

Record-high export levels

March export levels for both pork and beef set new value and volume records. March pork exports hit 217,025 metric tons and surpassed $553.6 million in value, a 31.3 per cent increase in volume and 40 per cent jump in value over year-ago levels. For the first quarter of 2011, pork exports accounted for nearly 27 per cent of total production and $50.79 in per-head export value.

Total beef exports in March of 117,075 metric tons were 45 per cent larger than year-ago and up 18 per cent from March 2003. On a value basis, exports were record-large at $475.2 million, up 65 per cent versus both March 2010 and March 2003. For the first quarter, exports were up 53 per cent in value and 32 per cent in volume, totaling $1.2 billion and 296,535 metric tons. On a value basis, exports have exceeded 2003 levels for the past five months and export volume also has exceeded 2003 in three of the past five months.

For the first quarter of 2011, beef exports equated to 13.4 per cent of production with value at $186.58 per head of fed slaughter.

South Korea sets pork import pace

As expected, pork export growth has been led by a 212 per cent increase to South Korea, totaling 73,905 metric tons valued at $175.9 million in the first quarter and 41,190 metric tons valued at $94.6 million shipped in March (more than four times higher than March 2010 and by far a new monthly record). Korea’s culling of one-third of its herd due to foot-and-mouth disease and the corresponding opening of a duty-free tariff rate quota have helped stimulate worldwide pork exports to Korea, although US pork is gaining market share over international competitors. Currently the United States holds a 36 per cent market share of Korea’s imported pork versus 28 per cent last year.

“While pork buying patterns in Korea tend to slow in the spring and US prices are traditionally higher in the summer, we are focused on maintaining our momentum throughout the year,” said Mr Seng. “The National Pork Board has responded to USMEF’s request by allocating $240,000 in Pork Checkoff dollars to expand and intensify our campaign to promote US pork to Korean consumers, importers and meat industry professionals.”

Mr Seng also noted that USMEF is seeking additional funds through the US Department of Agriculture’s Market Access Program (MAP) to sustain this program over multiple years. The United States faces aggressive competition in Korea from the European Union, Canada, Chile and other nations. The pending US/Korea free trade agreement (FTA) would be helpful in reducing tariffs and keeping the price of US pork competitive. Korea and Chile approved an FTA in 2004, and since that time Chilean pork exports to Korea have quadrupled in value to $111.5 million last year. The EU/Korea FTA also will be implemented in July, creating additional pressure for passage of the US/Korea FTA to maintain a level playing field.

Other pork exports

US pork exports to Japan have continued their strong pace – up 31.7 per cent in volume and 33.5 per cent in value in March and a solid 24 per cent in volume and 23 per cent in value for the quarter. The US also recaptured its 46 per cent market share of Japan’s total pork imports after a slight decline last year.

Mexico remains the top volume destination for US pork, buying 139,591 metric tons in the first quarter, 5 per cent less than 2010. In terms of value, exports to Mexico are essentially level for the quarter ($255.4 million), but edged up 3.4 per cent in March versus year-ago levels.

Seng noted that high prices have likely dampened Mexico’s demand, especially with a 5 per cent duty on bone-in ham and shoulder cuts resulting from a NAFTA trucking dispute, but exports have mostly held on a value basis and could be helped by the strengthening peso.

Other key export markets for US pork include:

• China/Hong Kong – This region increased US pork imports 31 per cent to 89,043 metric tons valued at $129 million in the first quarter while March imports of 32,614 metric tons were up 51 per cent from year-ago when H1N1 restrictions still hampered exports to China. Export values in March rose 31.4 per cent to $47.5 million. China’s hog prices are reportedly on the rise, helping build demand for imported pork. The US market share has surged this year—accounting for 40 per cent of China/Hong Kong’s first-quarter imports, up from just 16 per cent last year.



• Australia – Exports here in the first quarter were up 28 per cent to 18,554 metric tons valued at $58.2 million. March shipments of 9,245 metric tons were up 67 per cent in volume and 125 per cent in value ($29.2 million) from year-ago. The strong Australian dollar – currently trading around $1.08/US compared to an April-May 2010 average of around $0.90 – is no doubt helping pull more US pork into the country.



• Central/South America – First-quarter exports to this region were up 23 per cent in volume to 18,834 metric tons valued at $46 million, a 36 per cent hike. In March exports of 7,706 metric tons were up 48 per cent while values rose 57.6 per cent to $17.6 million. Exports to Chile surged 231 per cent to 5,148 metric tons in the quarter while exports to Honduras and Guatemala each increased 12 per cent, to 5,922 metric tons and 2,423 metric tons, respectively.



• Russia – March exports of 4,863 metric tons were double year-ago levels and first quarter exports of 12,872 metric tons were up 189 per cent from the very low levels of 2010 when the Russian market was essentially closed to US pork. Similarly, the value of exports to Russia is up 321 per cent ($35.2 million) for the quarter and 237.2 per cent ($14.1 per cent) for March.



• Others – First quarter exports to the ASEAN, Taiwan and the Caribbean were all lower, partially reflecting market access issues (particularly in Taiwan) and the impact of higher prices mixed with increased domestic production (especially the Philippines).

South Korea also sets beef pace

The top growth market for beef was South Korea with first quarter exports up 181 per cent to 52,635 metric tons and value up 190 per cent to $226.4 million. This put Korea narrowly behind Mexico for the top spot among US beef export destinations. Total March beef exports of 24,485 metric surged above March 2003 volume (when Korea was the No. 3 export market for US beef) and were three times larger than March 2010 exports. The US accounted for 38 per cent of Korea’s first quarter beef imports, up from 30.5 per cent market share one year ago

Last week, USMEF was designated as the recipient of $1 million in USDA MAP funds to augment its current efforts to address the impact of non-science-based import regulations on US beef exports to South Korea and build consumer confidence in US beef. USMEF also is applying for an additional $10 million in MAP funds over five years to expand and intensify the program.

“The US meat industry has faced unprecedented and unscientific technical barriers to trade that, in the name of food safety, have unnecessarily restricted US exports,” said Mr Seng.

“These new resources will enable us to expand and intensify our efforts with the goal of the complete restoration of the beef market in Korea.”

As is the case with pork exports to Korea, the pending approval of the US/Korea FTA would reduce tariffs on US beef exports to that nation and help ensure competitive pricing for US products.

Other beef exports

• Japan – Exports to Japan surged in the first quarter, up 73 per cent to 31,989 metric tons and up 85 per cent in value to $176.4 million. March exports of 11,630 metric tons were up 70 per cent and 91.2 per cent in value ($70.2 million) from March 2010.
  
  Weekly beef export data indicates that shipments to Japan have maintained this strong pace, even following the devastating 11 March earthquake. The US also has gained beef market share in Japan, accounting for 19.5 per cent of first quarter imports, up from 15 per cent year-ago. Japan is currently the fourth-largest market for US beef, following Mexico, Korea and Canada.



• Mexico – March exports showed reason for continued optimism, up 24 per cent to 23,307 metric tons and up 44.4 per cent in value to $87.8 million. First-quarter exports are up 10 per cent in volume to 63,849 metric tons and up 30 per cent in value to $239.4 million. US imports of feeder cattle from Mexico also have been strong this year, following a 30 per cent increase last year, which could help demand for more beef from the US.



• Canada – Up 15 per cent in volume (36,922 metric tons) and 35 per cent in value ($187.7 million) for the quarter and on a similar pace in March. Canadian cattle slaughter was down 10.6 per cent through April of 2011 as years of herd liquidation have limited beef production. This, along with a strong Canadian dollar, should continue to support imports of US beef. Imports of live cattle from Canada also were down 20 per cent in the quarter, further evidence of tight supplies of cattle to the north.



• Middle East – Despite unrest in the region, the Middle East continues to be a booming market for US beef. First quarter totals are up 35 per cent in volume (35,143 metric tons) and 63 per cent in value ($71.5 million). In March, year-over-year increases of 33.6 per cent in volume and 42.6 per cent in value were achieved.



• Russia – Continued growth in exports to Russia – up 9 per cent in volume (13,964 metric tons) and 12 per cent in value ($32.4 million) for the quarter. March shipments jumped 26.7 per cent in volume and 11.2 per cent in value. Exports should gain further momentum in the coming months to fill the US tariff rate quota of 41,700 metric tons (20,000 metric tons higher more than last year).



• ASEAN – First quarter exports to this region were down 19 per cent in volume (17,777 metric tons) and 14 per cent in value ($61.3 million) due to a 43 per cent volume decline to Vietnam. However, exports to Indonesia doubled in volume, reaching 4,435 metric tons valued at $6.2 million, while exports to the Philippines increased 21 per cent to 2,957 metric tons valued at $9.2 million, a 30 per cent hike.



• Hong Kong – Beef exports jumped 72 per cent in volume (13,082 metric tons) and 107 per cent in value ($59.7 million) for the quarter. In March, volumes were up 46 per cent over year-ago levels while values doubled.



• Taiwan – Reflecting market access challenges, first quarter exports to Taiwan were down 20 per cent in volume (6,789 metric tons) and 13 per cent in value ($39.2 million), but March totals showed some rebound, up 4.4 per cent in volume and 9.9 per cent in value. Taiwan’s import data for April also show improvement.

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