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CME: July Another Successful Month for Beef, Veal Exports

10 September 2018

US - July was another successful beef and veal export month, adding 17 per cent to July 2017’s export number and is the 6th month out of 7 posting double digit percentage volume gains in 2018, reports Steiner Consulting Group, DLR Division, Inc.

Year to date the US has exported 236 million pounds more beef and veal than last year, which is about 15 per cent ahead of 2017’s.

South Korea continued to be a powerhouse purchaser of US beef and veal, July data showed another big gain, 61 per cent ahead of last year, bringing the year to date figure to 113 million pounds of additional beef and veal compared to last year.

Sales to Taiwan were strong in July, up 46 per cent from last year, followed by Vietnam, up 20 per cent, Mexico up 17 per cent and Japan up 13 per cent. Nearly all the top US destinations continue to post large year to date gains.

However, the current US market tonnage has not been the only story this year. The US has shipped to more destinations in 2018. In 2017 the average number of destinations per month was 87.5 compared to 89.4 through the first 7 months of 2018.

Imported beef and veal have taken a different turn. July data posted a 2 per cent decline year-over-year. Australia and Mexico were notably down, 7 per cent and 15 per cent respectively. Imports were up from Brazil by 24 per cent and Uruguay by 12 per cent.

Year to date import figures show the US has bought just over 9 million more pounds of product. Canada and New Zealand are leading on a tonnage basis, with over 30 million pound gains from each. Nicaragua is up 10 million pounds, and shows the largest percentage gain up 14 per cent.

One trend consistent with the export side is the number of countries the US is trading with is expanding. Last year the monthly average number of countries of origin was 14.4 while this year the US has bought on a monthly average from 15.6 countries.

Canada, Australia, and New Zealand typically fall in the top three of origins the US purchase beef and veal products. USDA FAS also released in the last week annual summaries via GAIN reports for both Australia and New Zealand that give some context to the supply situation in those countries.

Australia continues to face challenges in rebuilding their herd because of extreme drought in the largest two cattle producing states. Earlier this year, Australian cattle on feed numbers hit record highs, as cattle were forced off pasture and into feedlots. Slaughter rates have also been higher this year, induced by drought related liquidation.

Expectations are that the Australian cattle herd will continue to decline in 2019, as producers face higher feed costs, and have had to ship many breeding animals to slaughter. This will, in turn, lead to lower slaughter rates in 2019, and decrease Australian exports.

The GAIN report notes that product shipped to the US is primarily beef used to make burgers and other products in the foodservice sector. For those interested in the full report it’s available here.

New Zealand’s GAIN report also has some insights to the growing beef production, which is estimated to be above 2017 by 3 per cent. Over the last three years, the report notes farmers have shifted to beef production and away from sheep production because of profitability.

New Zealand is expected to have slightly smaller production in 2019 as the cow and bull kill slows. Exports are expected to grow in 2019. Chilled beef shipped to China began in July of 2017 and has since expanded.

Year to date shipments to China are up 9 per cent in chilled beef, but the report notes this has not impeded shipments to the U.S., New Zealand’s largest buyer.

Daily Livestock Report - Copyright © 2008 CME. All rights reserved.

TheCattleSite News Desk

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