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CME: June Data Reveals Beef, Veal Exports Up Compared to a Year Ago

07 August 2018

US - USDA-ERS released monthly trade on a carcass weight basis yesterday that continued to show very strong US beef and veal exports, reports Steiner Consulting Group, DLR Division, Inc.

June data showed beef and veal exports 16 per cent above a year ago. This is the fifth month in 2018 to show double-digit growth. It also concludes the second quarter, which ended up 17 per cent over the prior year.

Beef shipments have increased to multiple destinations this year. The month of June continued that trend. South Korea led the way this month with a 50 per cent increase from June of 2017, followed by Taiwan, up 38 per cent, and Japan, up 12 per cent. Mexico and Vietnam also showed strong increases.

For all the success seen on the beef side, pork exports struggled in June as the onslaught of Mexican tariffs started to take effect and the cumulative effect of Chinese tariffs continued. Year-over-year comparisons were still positive, up 1 per cent from the prior year.

However, exports to China dipped 34 per cent below last year and recorded the lowest June volumes since 2015. The total tonnage decline was over 12 million pounds on a carcass weight basis. China bought 20 per cent less US pork in the second quarter than last year.

Mexico, a market that was five times the size of China’s in 2017, declined by 5 million pounds compared to the prior year. June marks the first month of Mexico’s retaliatory tariffs against US pork. It’s expected that this trend will continue, even though second quarter exports to Mexico were up 13 per cent.

Other markets struggled to maintain similar volumes to last year. Hong Kong purchases are 58 per cent below a year ago, and down 64 per cent in the second quarter. Taiwan finished June with strength, up 36 per cent year-over-year, but on the quarter bought 20 per cent less pork than the prior year.

There were a few bright spots on the trade front for pork. South Korea, another large US pork market bought significantly more pork from the US, increasing 28 per cent over June 2017 and is up 46 per cent in the spring quarter. Other US markets showed a 20 per cent increase, rounding out the total for second quarter exports up 6 per cent.

Significant headwinds remain ahead for US pork exports in the second half of the year. However, as prices continue to weaken in the US buying interest could continue. Quantities may maintain as we move along the demand curve, albeit at potentially lower values.

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TheCattleSite News Desk


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