U.S. Beef and Pork Exports on Record Pace through June

Published: Aug 06, 2021

U.S. red meat exports closed the first half of the year on a strong note, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Although volume and value eased from the enormous totals posted in April and May, export value was still the highest on record for the month of June and first-half shipments established a record pace for both beef and pork exports.

"USMEF had expected a continued strong performance in June for both beef and pork exports, despite significant headwinds," said USMEF President and CEO Dan Halstrom. "2021 has presented many formidable challenges for the U.S. industry, including a very tight labor situation, logistical obstacles that slowed product movement and foodservice restrictions in many key markets. So the fact that first-half exports reached record levels speaks to the loyalty of our international customer base, strong consumer demand for high-quality, nutritious U.S. red meat and the U.S. industry's ability to adapt to a challenging and rapidly changing business climate. We have also seen a welcome rebound in beef and pork variety meat volumes, which had been down last year."

June beef exports totaled 112,249 metric tons (mt), up 42% from a year ago when exports were still hampered by a COVID-related slowdown in production. Export value was $804.4 million, up 68% from a year ago and the third highest on record after April and May of this year. First-half exports reached 700,087 mt, up 18% from a year ago, valued at $4.64 billion (up 28%). Compared to 2018, the record year for U.S. beef exports, first-half results were up 6% in volume and 15% in value.

Pork exports reached 238,935 mt in June, up 15% from a year ago, while export value climbed 35% to $696.8 million. First-half pork exports topped last year's record pace by 1% at 1.58 million mt, valued at $4.33 billion (up 7%).

Despite foodservice restrictions, Asian demand for U.S. beef proves resilient

Beef export value equated to $351.18 per head of fed slaughter in June, up 60% from last June's COVID-impacted average. The first-half per-head average was $359.49, up 20% from a year ago. June exports accounted for 13.6% of total beef production and 11.5% of muscle cuts, both dramatically higher than a year ago. In the first half, exports accounted for 14.7% of total beef production and 12.5% for muscle cuts, each up about 1.5 percent points from a year ago.

Japan was the leading destination for June beef exports in both volume (24,864 mt, up 20% from a year ago) and value (up 28%). This pushed first-half exports slightly ahead of last year's pace at 156,287 mt (up 1%), while value increased 6% to $1.05 billion. Japan’s imports of chilled U.S. beef were up 8% in the first half, including growth in the short plate and chuck/round categories, with U.S. beef accounting for 51% of Japan's chilled import volume. Retail demand for U.S. beef remains extremely strong in Japan, where restaurants in several prefectures are required to close by 8:00 p.m. and restricted from serving alcohol.

Beef exports to South Korea reached 20,419 mt in June, up 36% from a year ago, valued at $169.4 million (up 55%). Exports to Korea established a torrid pace in the first half, climbing 22% from a year ago to 142,300 mt, and Korea was the leading value destination for U.S. beef at $1.08 billion (up 31%). Restaurants in Korea are also subject to shorter operating hours and other restrictions, but foodservice demand in Korea has weathered the pandemic fairly well through sharply higher takeout and delivery sales, while retail and e-commerce demand remains strong. Korea’s imports of chilled U.S. beef were up 25%, with the U.S. capturing 66% of Korea's chilled beef market.

Strong momentum continued for U.S. beef in China, with June exports holding close to the May total at 16,238 mt. Capitalizing on improved market access that took effect in March 2020 under the Phase One Economic and Trade Agreement, first-half beef exports to China increased more than 1,000% from a year ago in both volume (81,001 mt) and value ($622.5 million). China recently imposed extensive travel restrictions to counter spread of the COVID-19 Delta variant and mass testing and quarantines are occurring in some areas, but so far restaurant service has not been restricted.

Other first-half highlights for U.S. beef exports include:

Beef exports to Mexico – a critical destination for rounds and other underutilized muscle cuts, as well as beef variety meat – increased 15% from a year ago in volume (99,621 mt) and 22% in value ($481.3 million). The increase was due in part to a resumption in foodservice demand, including from the travel and tourism sector.
After a slow start to the year, beef exports to Taiwan rebounded to 29,361 mt, up 1% from last year's record pace, valued at $279.6 million (up 11%). The U.S. dominates Taiwan's chilled beef market, capturing 78% market share in 2021. Taiwan suspended dine-in service for restaurants in mid-May in response to a wave of COVID-19 cases. But similar to other markets, retail demand for U.S. beef has surged. Dining establishments began the gradual resumption of full service in late July, but under significant social distancing restrictions.
Fueled by outstanding demand in Guatemala, Honduras, Costa Rica and El Salvador, beef exports to Central America climbed 54% from a year ago to 9,719 mt, valued at $57.6 million (up 69%).
Led by growth in Chile and Colombia, beef exports to South America rebounded from last year's low totals to reach 14,342 mt, up 23% from a year ago, while value climbed 57% to $72.9 million.
Exceptional variety meat demand, plus growth in muscle cut volumes, fueled a strong first-half increase in exports to the ASEAN region, led by Indonesia and the Philippines. Total exports to the ASEAN climbed 25% from a year ago to 28,773 mt, valued at $140.3 million (up 23%). This included a 55% increase in both volume (9,670 mt) and value ($21.3 million) for beef variety meat exports.

Surging demand in Mexico, Central America fuels first-half pork exports

Pork export value equated to $65.44 per head slaughtered in June, up 42% from a year ago. Per-head value averaged $67.04 in the first half, up 5%. June exports accounted for 29.4% of total pork production and 25.5% of muscle cuts, both up significantly from a year ago. In the first half, exports accounted for 31.4% of total pork production (steady with last year) and 28.1% for muscle cuts (down one-half percentage point from a year ago).

After reclaiming its position as the leading destination for U.S. pork muscle cuts in the second half of last year, Mexico emerged as the top market for total exports in June at 70,582 mt, up 45% from a year ago, while export value more than doubled to $149.4 million (up 112%). First-half exports to Mexico climbed 22% from a year ago to 396,329 mt, valued at $789.5 million (up 45%). In 2017, the record year for pork exports to Mexico, first-half volume was slightly ahead of this year's pace at 398,565 mt, but export value is 8% higher in 2021.

Led by a near-doubling of exports to El Salvador and strong growth in mainstay markets Honduras and Guatemala, first-half pork exports to Central America topped last year's record pace by 50% at 67,795 mt, with value up 57% to $176.6 million. Exports were also sharply higher to Costa Rica and posted year-over-year increases in Panama and Nicaragua.

Pork exports to Japan continued to gain momentum in June, increasing 40% from a year ago to 33,419 mt, valued at $138.5 million (up 29%). First-half exports were 7% ahead of last year's pace in volume (207,699 mt) and 6% higher in value ($865.1 million). Growth was driven by increased shipments of U.S. chilled pork, as Japan’s retail demand remains robust.

Other first-half highlights for U.S. pork exports include:

Fueled in part by a temporary reduction in tariff rates, first-half exports to the Philippines more than tripled from a year ago to 58,010 mt (up 239%), valued at $176.6 million (up 257%). The Philippines has struggled with pork shortages since African swine fever (ASF) was confirmed there in 2019, resulting in a sharp decline in domestic pork production. This prompted the Philippine government to reduce duty rates on imported pork muscle cuts through January 2022, which has helped bolster demand for U.S. pork in this price-sensitive market.
Pork exports to South Korea continued to rebound in June, pushing first-half volume to 96,154 mt, up 3% from a year ago. Export value climbed 12% to $301.4 million, thanks in part to a sharp increase in chilled pork exports. Korean import data show first-half imports of chilled U.S. pork increased by 154% to 3,694 mt, valued at $21.88 million (up 170%), including a mix of belly cuts and CT butts.
After a down year in 2020, pork exports to Colombia rebounded to 46,899 mt, up 47% from a year ago. Export value climbed 54% to $108.7 million.
First-half exports to the Dominican Republic increased 38% from a year ago to 29,181 mt, with value up 49% to $71.4 million. USMEF does not expect the recent finding of ASF in the Dominican Republic to have a lasting impact on pork demand, but it could result in reduced domestic production. The U.S. is by far the top supplier of pork to the Dominican Republic, capturing 94% of the imported pork market.
While China/Hong Kong remains the largest destination for U.S. pork exports in 2021, first-half exports were down 22% from a year ago in both volume (471,565 mt) and value ($1.1 billion). Exports to China/Hong Kong accounted for just under 30% of total U.S. export volume, after reaching 39% in the first half of 2020. Although demand for muscle cuts has declined with the drop in China's hog prices, U.S. pork variety meat exports to China increased by 25% in the first half, reaching 166,809 mt. Export value climbed 30% to $408.7 million.

Western Hemisphere markets drive increase in first-half lamb exports

June exports of U.S. lamb were 37% below last year at 1,083 mt, but still managed a slight increase in value to $1.6 million. For the first half of the year, lamb exports increased 25% from a year ago to 6,816 mt, valued at $9.1 million (up 14%). Export growth was fueled mainly by strong demand for both muscle cuts and variety meat in Mexico, as well as larger muscle cut shipments to Bermuda, Trinidad and Tobago and Canada.

Complete January-June export results for U.S. pork, beef and lamb are available from USMEF's statistics web page.

For questions, please contact Joe Schuele or call 303-547-0030.

NOTES:

Export statistics refer to both muscle cuts and variety meat, unless otherwise noted.

One metric ton (mt) = 2,204.622 pounds.

U.S. pork currently faces retaliatory duties in China. China's duty rate on frozen pork muscle cuts and variety meat increased from 12% to 37% in April 2018, from 37% to 62% in July 2018 and from 62% to 72% on Sept. 1, 2019. The rate on pork cuts was reduced to 68% on Jan. 1, 2020, through a reduction in the most-favored-nation (MFN) rate and to 63% on Feb. 14, 2020, through a reduction in the Section 301 retaliatory duty. The duty on pork variety meat was reduced to 67% on Feb. 14.

U.S. beef faces retaliatory duties in China. China's duty rate on beef muscle cuts and variety meats increased from 12% to 37% in July 2018 and from 37% to 47% on Sept. 1, 2019. It was reduced to 42% on Feb. 14, 2020.

In February 2020, China announced a duty exclusion process that allows importers to apply for relief from duties imposed in response to U.S. Section 301 duties. When an application is successful, the rate for U.S. beef can decline to the MFN rate of 12% and the rate for U.S. pork can decline to 33% for muscle cuts and 37% for pork offal (the 25% Section 232 retaliatory duty on U.S. pork remains). Some importers reported receiving duty relief beginning on March 2, 2020.

Mexico's duty rate on pork muscle cuts increased from zero to 10% in June 2018 and jumped to 20% the following month. Beginning in June 2018, Mexico also imposed a 15% duty on sausages and a 20% duty on some prepared hams. Mexico removed all duties in late May 2019.