August beef exports soar, pork exports still under pressure

WASHINGTON — U.S. beef exports set new records in August with export value topping $750 million for the first time, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). August pork exports were fairly steady with last year’s volume, but retaliatory duties in key markets continued to pressure pork export value.

August beef exports totaled 119,850 metric tons (mt), up 7 percent from a year ago, valued at $751.7 million — up 11 percent year-over-year and easily exceeding the previous record of $722.1 million reached in May 2018.

For January through August, beef exports totaled 899,300 mt, up 9 percent from a year ago, while value climbed 18 percent to $5.51 billion. For the third consecutive month, beef muscle cut exports set a new volume record in August at 95,181 mt (up 9 percent from a year ago), valued at $679.6 million (up 13 percent).

Through August, muscle cut exports were 14 percent ahead of last year’s pace in volume (692,234 mt) and 21 percent higher in value ($4.93 billion). August exports accounted for 13.2 percent of total beef production, up from 12.5 percent a year ago.

Muscle cuts

For beef muscle cuts only, the percentage exported was 11.2 percent, up from 10.4 percent last year. For January through August, exports accounted for 13.5 percent of total beef production and 11.1 percent for muscle cuts — up from 12.8 percent and 10.1 percent, respectively, last year.

Beef export value averaged $320.92 per head of fed slaughter in August, up 11 percent from a year ago. The January-August average was $318.66 per head, up 16 percent.

“U.S. beef exports continue to achieve tremendous growth, not only in our mainstay Asian markets but in the Western Hemisphere as well,” said USMEF President and CEO Dan Halstrom.

“USMEF is excited about the recent market access developments achieved by the Office of the U.S. Trade Representative (USTR) and USDA, with favorable terms being preserved in Mexico, Canada and South Korea and trade talks getting underway with Japan. A trade agreement with Japan would bring opportunities for even greater expansion as U.S. beef becomes more affordable for Japanese consumers and is back on a level playing field with Australian beef.”

Pork exports

August pork export volume was down 1 percent from last year at 182,372 mt, while export value fell 3 percent to $494.1 million. Pork muscle cuts fared better in August, increasing 5 percent to 148,736 mt, but value still declined 1 percent to $414.7 million.

Pork variety meat exports declined sharply in August in both volume (33,636 mt, down 20 percent) and value ($79.4 million, down 15 percent). For January through August, combined pork and pork variety meat exports remained 1 percent ahead of last year’s record pace at 1.63 million mt, while value increased 3 percent to $4.32 billion.

For pork muscle cuts only, exports increased 6 percent from a year ago in volume (1.31 million mt) and 4 percent in value ($3.58 billion). August exports accounted for 21.9 percent of total pork production, down from 23.1 percent a year ago, while the percentage of muscle cuts exported held steady at 19.2 percent.

For January through August, exports equaled 26.3 percent of total pork production (down from 26.9 percent a year ago), while the percentage of muscle cuts exported was 22.8 percent (up from 22.4 percent).

Retaliatory tariffs

Pork export value averaged $44.29 per head slaughtered in August, down 8 percent from a year ago, while the January-August per-head average dropped 1 percent to $53.28. U.S. pork currently faces retaliatory duties in two markets: China and Mexico.

China’s duty rate on pork muscle cuts and variety meat increased from 12 to 37 percent in April and from 37 to 62 percent in July. Mexico’s duty rate on pork muscle cuts increased from zero to 10 percent in June and jumped to 20 percent in July (pork variety meats continue to enter Mexico duty-free).

Beginning in June, Mexico also imposed a 15 percent duty on sausages and a 20 percent duty on some prepared or preserved hams and shoulders.

“Pork exports have posted an impressive performance in 2018, but the retaliatory duties are clearly a significant obstacle,” Halstrom explained. “The fact that U.S. trade officials were able to secure duty-free access for U.S. red meat in the new U.S.-Mexico-Canada Agreement is critically important, and we are hopeful that duty-free access for U.S. pork entering Mexico will be restored soon.”

Halstrom said that Tariff relief in China may not come as quickly, but USMEF continues to work with industry partners to keep as much product as possible moving to China while also working aggressively to expand exports in other key markets, including Korea, Central and South America, the ASEAN region and Australia.

U.S. beef also currently faces retaliatory duties in two markets: China and Canada. China’s duty rate increased from 12 to 37 percent in July, with the higher rate applying to all eligible products. Canada’s 10 percent duty, which also took effect in July, applies to cooked/prepared beef products. All other U.S. beef still enters Canada duty-free.

Lamb

August exports of U.S. lamb reached the largest monthly volume this year (1,353 mt, up 105 percent from a year ago), due primarily to large shipments of lamb variety meat to Mexico. August export value was just under $2 million, up 16 percent year-over-year.

Lamb muscle cut exports took a step back in August, totaling just 142 mt – down 32 percent from a year ago and the lowest since January. Through August, lamb exports were 60 percent ahead of last year’s pace in volume (8,033 mt) and 20 percent higher in value ($15.4 million).

This growth was fueled mainly by stronger variety meat demand in Mexico, but muscle cut exports increased significantly to the Caribbean, the United Arab Emirates, Singapore and the Philippines.