08-08-16 U.S. Pork, Beef Exports Solid in June; First-half Volumes Ahead of Last Year…

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U.S. Pork, Beef Exports Solid in June; First-half Volumes Ahead of Last Year

U.S. red meat exports ended the first half of 2016 on a positive note, as June export values for both pork and beef were the highest of the year. June also marked the second consecutive month of solid year-over-year volume growth, according to statistics released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

Pork exports reached 187,939 metric tons (mt) in June, up 8 percent from a year ago, while export value increased 11 percent to $505.4 million. For the first half of the year, pork export volume was up 2 percent to 1.1 million mt, but value was down 4 percent to $2.77 billion.

Exports accounted for 26 percent of total pork production in June and 22 percent for muscle cuts only – each up one percentage point from a year ago. For January through June, these ratios were 25 percent and 21 percent, respectively, up slightly from last year. Export value per head slaughtered was $52.83 in June – up 10 percent from a year ago. First-half per-head value was $48.34, down 5 percent.

June beef export volume increased 2 percent from a year ago to 98,920 mt, while export value was $545.4 million, down 5 percent. First-half export volume was up 3 percent to 541,547 mt, while value fell 10 percent to $2.91 billion.

Exports accounted for 13 percent of total beef production in June and 10 percent for muscle cuts only – each down about 1 percentage point from a year ago. For January through June, these ratios were also 13 percent and 10 percent, respectively, steady with last year. Export value per head of fed slaughter was $250 in June and $249.67 for the first half – each down 14 percent from a year ago.

Pork exports strong to China/Hong Kong, Canada, Central America

June pork exports to China/Hong Kong remained well ahead of last year’s pace, increasing 84 percent in volume (50,374 mt) and 73 percent in value ($98.8 million). But June volume was the lowest since February, reflecting some cooling of the market. Exports to China/Hong Kong finished the first half 80 percent higher than a year ago in volume (284,900 mt) and 63 percent higher in value ($540.5 million).

“New opportunities for U.S. pork were developed in China/Hong Kong over the past year, and the inroads we made with importers and other key buyers in the region will pay long-term dividends,” said USMEF President and CEO Philip Seng. “But it is important to recognize the shift in market conditions in China, which means growth in other key markets is essential to achieving a successful second half in 2016.”

Leading pork value market Japan showed renewed momentum in June, with exports up 1 percent from a year ago in volume (32,879 mt) and 6 percent higher in value ($138.1 million). First-half exports to Japan were still down 13 percent in volume (192,862 mt) and 10 percent in value ($749.6 million), as record volumes of chilled U.S. pork entering Japan (109,665 mt, up 19 percent, valued at $485 million, up 14 percent) were offset by lower imports of frozen product.

After a strong May performance, pork exports to Mexico took a step back in June, falling 13 percent from a year ago in volume (54,335 mt) and 5 percent in value ($105.4 million). First-half export volume to Mexico was 324,745 mt, down 8 percent from a year ago, while value fell 9 percent to $566 million. A spike in ham prices, compounded by the weak peso, significantly impacted June export results. But with ham prices moderating by mid-July, USMEF anticipates a rebound in demand.

June results were better north of the border, as pork exports to Canada totaled 16,731 mt – up 11 percent from a year ago and the largest of 2016 – while export value increased 13 percent to $69.5 million. This pushed first-half exports to Canada slightly ahead of last year’s pace at 96,582 mt, while value was steady at $381.6 million.

Led by mainstay markets Honduras and Guatemala, U.S. pork posted a very strong first half in Central America as exports climbed 16 percent from a year ago in volume (31,274 mt) and 7 percent in value ($72.5 million). In addition to Honduras and Guatemala, exports also increased year-over-year to Nicaragua, Costa Rica, El Salvador and Belize.

June was also a very strong month for U.S. pork in the Philippines, a highly competitive market that purchases large volumes of raw material for further processing. June exports to the Philippines increased 54 percent from a year ago in volume (3,454 mt) and more than doubled in value ($10.3 million, up 126 percent). First-half exports totaled 15,995 mt (up 6 percent) valued at $37 million (up 23 percent).

U.S. beef reclaims market share in Japan; June ASEAN volume doubles

June beef exports to Japan were the largest in nearly two years at 25,836 mt, up 29 percent from a year ago. First-half exports climbed 12 percent in volume (122,316 mt) and 5 percent in value ($707.2 million). Showing strong demand for high-quality cuts, Japan’s first-half imports of chilled U.S. beef surged 51 percent from a year ago to 50,795 mt. These shipments were valued at $369 million, up 32 percent. Japan’s first-half import data also show a strong rebound in market share for U.S. beef at 38.5 percent – up from 33 percent in 2015 and about one percentage point higher than in 2014. Australia’s market share, which was nearly 57 percent in the first half of last year, fell to 52 percent.

“U.S. beef faces a significant tariff rate disadvantage in Japan, and this gap will grow larger unless and until the Trans-Pacific Partnership is ratified,” Seng said. “But rather than dwell on the challenges we face in this market, the U.S. industry needs to capitalize on its opportunities. And USMEF is doing so by educating retail and foodservice buyers about the wide range of U.S. beef cuts that appeal to their customers. We’re pushing well beyond the forequarter cuts traditionally marketed in Japan, and consumers are responding in a very positive way.”

Beef exports to Mexico remained strong in June, increasing 14 percent from a year ago to 20,021 mt, though value was down 13 percent to $76.2 million. First-half exports to Mexico were up 3 percent in volume to 111,834 mt, valued at $475.4 million (down 11 percent).

U.S. beef continues to gain market share in South Korea, with June export volume up 2 percent from a year ago at 12,880 mt. For January through June, exports to Korea were up 21 percent from a year ago in volume (73,942 mt), while value was 3 percent higher at $436.4 million. Chilled beef to Korea totaled 10,288 mt (up 45 percent) valued at $89 million (up 33 percent) as U.S. beef rapidly expands its retail presence.

Fueled by strong growth in the Philippines, Indonesia and Vietnam, June exports to the ASEAN region reached 2,582 mt, up 113 percent from a year ago, while export value climbed 57 percent to $12.6 million. First-half exports totaled 11,091 mt (up 7 percent) valued at $61.6 million (down 14 percent).

Lamb exports slump due to low variety meat volume

June lamb exports were the lowest of 2016 at 457 mt, down 58 percent from a year ago, though this was due in large part to a sharp decline in variety meat exports to Mexico. June export value fell 39 percent to $1.1 million. For the first half of 2016, lamb exports were down 9 percent from a year ago in volume (4,330 mt) and fell 13 percent in value ($8.7 million). Exports to Bermuda continued to perform well in June.

Complete first-half export results for U.S. beef, pork and lamb are available from USMEF’s statistics web page.

Monthly charts for U.S. pork and beef exports are also available online.

If you have questions, please contact Joe Schuele at jschuele@usmef.org or call 303-547-0030.