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April Beef Exports Reflect Tough Economic Climate

12 June 2009

US - Despite the prolonged slowdown in global economic activity and the initial wave of A-H1N1 Influenza-related market reactions, exports of US beef held up reasonably well in the month of April.

April beef plus beef variety meat exports declined 1.4 per cent in volume and by 6 per cent in value compared to last year. For the first four months of the year, beef export volume has increased 2 per cent to 277,019 metric tons (610.7 million pounds) but declined slightly in value to $937 million.

“The trade environment for beef was not directly impacted by A-H1N1 Influenza as much as it was for pork,” USMEF President and CEO Philip Seng said. “But anytime consumer activity takes such a major hit, beef trade is likely to suffer. I believe US beef will perform well this year, but we need to see an economic rebound in key markets like Mexico, South Korea and Taiwan, and the industry also needs expanded access in many of these markets so we can move a wider range of cuts.”

Specifically, the beef industry is working with trade officials to gain access for US beef in Taiwan that includes bone-in cuts and variety meat. The industry is also seeking relief from the 21-month age limit for cattle from which beef is eligible for export to Japan. Beef exports from four states – Illinois, Texas, Washington and Wisconsin – have also been suspended temporarily by Russia.

Beef exports to Canada, Mexico remain sluggish, but decline is offset by other markets

Exports to Mexico and Canada - the top two markets for US beef in 2008 – continue to struggle due to a number of factors. Exchange rates are far less favorable than last year and the down economy – especially in Mexico – has steered consumers toward lower-priced proteins. As a result, beef exports to Mexico are down more than 20 per cent in volume and value compared to the first four months of last year.

In Canada, US beef exports have declined about 10 per cent in volume and 16 per cent in value compared to 2008. While a decline in live cattle imports from Canada to the United States might suggest an increase in domestic supply, Canada’s cattle slaughter is actually down about 2 per cent from last year. This reflects a continued contraction in the Canadian cattle herd, which may bode well for increased beef exports to Canada once more favorable economic conditions return.

The ASEAN region has been a mainstay for US beef exports this year, and April was no exception. Exports to the region increased by 72 per cent in volume and per cent in value over April 2008. Led by a surge in activity in Vietnam, exports to the ASEAN region have increased by 63 per cent in volume (to 26,030 metric tons or 57.4 million pounds) and 93 per cent in value (to $84.3 million) over January-April of last year.

Japan continues to regain strength as a destination for US beef, with April exports climbing by 10 per cent over April 2008. For the first four months of the year, beef exports to Japan have increased by about 25 per cent in both volume and value compared the same period last year, totaling 19,914 metric tons (43.9 million pounds) valued at about $106 million.

TheCattleSite News Desk



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