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U.S. Beef Demand Surges

15 August 2008

US - Resumption of beef exports to South Korea represents an important and well-publicized breakthrough for U.S. beef producers, as Korea once represented the third-largest market for U.S. beef. But as the first-half results for 2008 strongly indicate, demand for U.S. beef is now surging in a wide range of foreign markets.

Beef and beef variety meat exports in June increased 35 percent and totaled 89,054 metric tons, valued at $328 million. During the first half of the year, these exports totaled 445,036 metric tons, valued at $1.58 billion – an increase of 30 percent in volume and 39 percent in value. First-half exports reached 71 percent of the volume achieved in the first six months of 2003, and 87 percent of the value achieved during the same time period.

The top-performing markets for U.S. beef and beef variety meats continue to be Mexico and Canada. Through June, exports to Mexico were up 18 percent in volume over last year to 199,890 metric tons valued at $678.1 million. Exports to Mexico set a new record in June - surpassing the July 2003 volume and reaching 36,619 metric tons. Meanwhile, Jan.-June exports to Canada rose 41 percent to 78,790 metric tons, valued at $365.8 million.

U.S. beef continues to rebuild market share in Japan – once the single largest market for beef exports. Beef and beef variety meat sales in Japan climbed 66 percent in volume over last year to 34,339 metric tons, valued at $177 million. In June, exports totaled 10,146 metric tons - up more than 90 percent over last year and the largest monthly volume since the market closed in December 2003. USMEF’s efforts to expand Japan’s imports of alternative cuts have paid off, as a much wider range of beef cuts are now marketed in Japan. These alternative cuts help maximize the volume and value of exports from Japan-eligible cattle, which must be less than 21 months of age.

U.S. beef is also showing much greater penetration in the Association of Southeast Asian Nations (ASEAN). Through June, year-to-date exports to this region rose 380 percent in volume over last year to 24,454 metric tons, valued at $67.1 million. Vietnam led the way with 18,092 metric tons, followed by the Philippines at 4,992 metric tons.

Beef exports to Russia are well on their way to surpassing 2003 levels – the last year this market was open to U.S. beef. Russia has imported 11,194 metric tons of beef and beef variety meats so far this year, valued at $25 million. But even more significant is the impact Russia’s demand is having on selected cuts.

“Liver prices increased dramatically as Russia started bidding against Egypt for the limited supply of U.S. beef livers,” Daley explained. “Liver prices have risen to more than 70 cents per pound, compared to less than 20 cents per pound last year. This has added roughly $7 per head on a live animal basis.”

Daley said that while this year’s beef exports won’t be able to match the peak levels achieved earlier in this decade, the beef industry is getting close to reaching the same level of value. While beef exports exceeded $3.8 billion in 2003, she forecasts that this year’s exports could total as high as $3.5 billion – assuming no major disruptions in trade.

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