News & Events | U.S. Pork, Beef Exports Defy Expectations

U.S. Pork, Beef Exports Defy Expectations – Remain High

While the U.S. agriculture community undoubtedly has been feeling the significant effects of the global economic downturn, the export numbers for October continue to show progress over the previous year.

Pork exports in particular held up extremely well, posting the third-largest monthly volume on record that equates to a 46 percent volume increase over exports from October of 2007 and a 55.5 percent increase in value.

Specifically, pork and pork variety meat exports in October totaled 192,940 metric tons (425.4 million pounds) valued at $487 million – a new record for monthly export value. Export volume increased 18 percent over the previous month and trails only May and June of 2008 for most pork exported in a single month. For January through October, exports were up 67 percent to 1.7 million metric tons (3.8 billion pounds), with value surpassing $4.1 billion.

Erin Daley, USMEF Economist

The story for U.S. beef also remains positive. Although smaller than the summer peak, beef plus beef variety meat exports were relatively strong in October, exceeding October 2007 volume levels by 16 percent. U.S. beef and variety meat exports for the month reached 89,205 metric tons (196.7 million pounds) valued at $348.3 million, exceeding year-ago export value totals by 31.4 percent. January through October beef exports, including variety meat, increased 31 percent to 840,121 metric tons (1.8 billion pounds), with value surpassing $3.1 billion, an increase of 43 percent.

“The effects of the global economic turmoil are being felt in many markets, and these market conditions almost certainly have tempered the export numbers that we might have seen from U.S. beef and pork had the credit markets not taken such a hit,” said Erin Daley, economist for the U.S. Meat Export Federation.

“However, we are continuing to see the value and quality of U.S. exports reflected in the export numbers,” she said. “Even with the depreciation in the value of many countries’ currencies, we’re still seeing strong performance by our beef and pork products, defying many expectations. USMEF does understand that some countries are having difficulty distributing imported meat due to dampened consumer demand. This is especially critical in areas like China, with large stocks of frozen pork, and Korea with large volumes of beef in storage. Prices were much higher, even for meat imported just a few months ago, making it difficult to sell under current market conditions.”

October pork highlights

Japan – U.S. pork continues its reign as the king of imported pork in Japan. Exports to Japan set another monthly record at 41,961 metric tons (92.5 million pounds) valued at $158.5 million. For the year, U.S. pork exports are up 27 percent in volume to 377,632 metric tons (832.5 million pounds) valued at $1.29 billion, an increase of 35 percent. Japan accounts for 31 percent of the total value of U.S. pork exports and, when only muscle cuts are measured, Japan accounts for 39 percent of U.S. pork export value.
Mexico – Exports to Mexico also set a new record for the month at 39,826 metric tons (87.8 million pounds), surpassing the July record and rebounding 35 percent from lower September volumes. Mexico was the second-largest destination for U.S. pork for the month, but trails China/Hong Kong for year-to-date totals. During the first nine months of 2008, exports to Mexico stand at 307,056 metric tons (676.9 million pounds) valued at $549.6 million, an increase of 38 percent in volume and 52 percent in value over last year.
Russia – despite the credit crisis, the depreciation of the ruble, falling oil prices and general economic uncertainty, Russia set another record for U.S. pork and variety meat imports in October at 31,744 metric tons (nearly 70 million pounds). Muscle cuts accounted for 17,444 metric tons (38.5 million pounds), with most likely subject to the 60 percent duty or at least 1 euro/kg. This would equate to over-quota duties of nearly $27 million in October and in excess of $140 million for the first 10 months of the year.

Total pork exports to Russia for the year have surpassed 200,000 metric tons (441.7 million pounds) valued at $435.5 million, a 173 percent increase in volume and 184 percent increase in value. Muscle cuts have accounted for nearly 70 percent of U.S. pork exports to Russia.

According to Russian import data, Russia surpassed the United States as the largest importer of beef in the world with 677,226 metric tons (1.5 billion pounds) of imports. During the first nine months of 2008, Russia reported that it imported about 2.3 million metric tons (5.1 billion pounds) of poultry, pork and beef during, trailing only China/Hong Kong (2.8 million metric tons or 6.2 billion pounds) as the largest meat importing region in the world. “Meat trade flow in 2009 will largely depend on production, prices and consumer demand in China and Russia,” Daley said.

China/Hong Kong – pork exports to this region remain above 2007 volumes, buoyed by continued strength in variety meat exports, with the majority of product going to Hong Kong. October exports totaled 27,361 metric tons (60.3 million pounds), up 21 percent from September and 15 percent from a year ago. Total 2008 exports equaled 357,962 metric tons (789.2 million pounds) valued at $618.4 million, a 178 percent increase in volume and 209 percent increase in value.

Daley noted that China’s domestic production growth, corresponding pork prices and consumer demand, given the economic slowdown, will determine pork exports to the region during 2009. “Thus far it appears that Chinese production continues to increase, with greater hog productivity given investment in commercial farms,” she said, “yet production profitability has fallen with the decline in hog prices and many producers are likely operating just around breakeven. Therefore, the incentive for further production growth in 2009 could be hampered by relatively lower profitability. Consumer demand also is expected to be sluggish through the winter and reported stocks of frozen imported pork are still weighing on the market.”

Canada – October’s exports dipped below 2007 levels, but export totals of 13,755 metric tons (30.3 million pounds) were relatively steady compared to previous months in 2008. For the year (January through October), exports totals of 139,672 metric tons (307.9 million pounds) are up 18 percent from last year. Canada’s official challenge of COOL combined with the weak Canadian dollar, lower hog numbers and smaller live hog exports to the United States will influence trade in 2009, Daley said.
South Korea – exports in October were 10,283 metric tons (22.7 million pounds), a 24 percent increase over October of 2007 and 10 percent above the prior month. Exports for the first 10 months of 2008 were up 48 percent to 112,281 metric tons (247.5 million pounds) valued at $240.4 million, a 33 percent increase over last year.
ASEAN – exports to this region were fairly strong at 3,500 metric tons (7.7 million pounds) in October, led by 2,262 metric tons (nearly 5 million pounds) to the Philippines. While these volumes are well below the summer peak, they remain 106.5 percent above October 2007 for the region with exports to the Philippines up 137 percent. For the 10-month period, exports to the region were up 350 percent to 50,479 metric tons (111.3 million pounds), equaling a 364 percent hike in value to $99.8 million. Export volume in the region thus far in 2008 has grown 232 percent in the Philippines, 967 percent in Vietnam and 364 percent in Singapore.
European Union – pork muscle cut exports to the EU-27 totaled 5,302 metric tons (11.7 million pounds) in October, more than double last year’s volume, putting the 2008 10-month total at 44,568 metric tons (98.3 million pounds) valued at $121.6 million. Once again, USMEF stresses the importance of analyzing EU import data for a more accurate estimate of trade between the U.S. and the EU. EU import data is only available through August, but imports are reported at about half of the export volumes reported by the United States, still a 167 percent increase over last year.

October beef highlights

Mexico – beef exports to the largest U.S. beef export market fell again in October, down 22 percent from the prior month and 27 percent from a year ago. Still, exports for the first 10 months of 2008 remain up 14 percent at 339,137 metric tons (747.7 million pounds). Those same exports were valued at $1.2 billion, a 21 percent increase in value. Daley noted that the weak Mexican peso has more than offset the decline in U.S. beef prices, making round cuts more expensive than this summer, when prices peaked in U.S. dollar terms.
Canada – exports to our No. 2 trading partner also declined again in October to 13,150 metric tons (29 million pounds), down 17 percent from September and 20 percent from a year ago. Totals for 2008 remain up 25 percent in volume to 133,005 metric tons (293.2 million pounds) valued at $623.2 million, a 28 percent rise. Daley expects that the weak Canadian dollar, fewer live cattle exports to the United States and the COOL implications will continue to influence beef trade with Canada.
Japan – exports here rebounded some in October to 7,170 metric tons (15.8 million pounds), the largest volume since July. January through October exports were up 63 percent to 64,679 metric tons (142.6 million pounds) valued at $333 million, a 61 percent jump in value over 2007. When compared to the first 10 months of 2003, beef exports to Japan in 2008 are equivalent to 20 percent of export volume and 28 percent of export value.

“Since the yen is basically the only currency that is strong relative to the U.S. dollar at this time, exports to Japan should continue at a strong pace, though limited by a smaller number of cattle under 21 months of age being processed through the winter months,” Daley said.

South Korea – the second-largest destination for U.S. beef exports in October, South Korea imported 15,561 metric tons (34.3 million pounds) of beef and variety meat valued at nearly $83 million, down slightly from September totals. For the year, exports weighed in at 46,946 metric tons (103.5 million pounds) valued at nearly $245 million, up 87 and 107 percent, respectively, compared to last year.

“With the three major retailers resuming U.S. beef sales since Thanksgiving, U.S. beef is finally moving into the Korean market in significant volumes,” Daley said. “Unfortunately, Korea has been hit especially hard during the global financial crisis, with the won losing about 30 percent relative to the U.S. dollar over the past few months, although the won is rebounding slightly in December. Luckily U.S. beef is a high quality, affordable option for Korean consumers, at a much lower price than domestic Hanwoo beef.”

ASEAN – this region continues to import at a healthy rate: 5,363 metric tons (11.8 million pounds) in October, up 46 percent compared to last year. Total 2008 volume is up 261 percent to 45,083 metric tons (99.4 million pounds) valued at $137 million, up 325 percent. Vietnam is still taking the majority of the beef, accounting for 33,969 metric tons (74.9 million pounds) for the year and 4,348 metric tons (9.6 million pounds) in October. Thus far in 2008, exports to Vietnam are up 318 percent in volume and 500 percent in value, reaching $107.2 million.
Middle East – exports rebounded 28 percent in October from the previous month. Compared to October 2007, exports are still down 15 percent in volume but are up 17 percent in value. For the year, exports are down 5 percent in volume (76,122 metric tons or 167.8 million pounds) but up 33 percent in value to $121.9 million. Egypt still accounts for the bulk of export volume, mainly livers, with growing beef markets in the UAE and Saudi Arabia.
Russia – while reduced from the previous three months, U.S. beef exports to Russia continued in October at 6,929 metric tons (15.3 million pounds), mainly comprised of variety meat. Total 2008 exports were 43,671 metric tons (96.3 million pounds), of which 15,438 metric tons (34 million pounds) were muscle cuts compared to just 3,568 metric tons (7.9 million pounds) in all of 2003.
Taiwan – exports in October of 1,817 metric tons (4 million pounds) were about even with September volumes and lower than the large volumes seen earlier in the year. January through October exports of 23,021 metric tons (50.7 million pounds) already have set a new annual record for beef exports to Taiwan, and are up 29 percent from last year to date. Daley noted that buying pressure from Korea has led to higher U.S. beef prices. When combined with larger beef inventory volumes and weaker consumer demand, these factors have pressured U.S. beef export volumes to Taiwan. This trend is expected to continue, likely with increased competition from Australian beef.
European Union – October exports to the EU were the largest yet this year at 1,947 metric tons (4.3 million pounds). Year-to-date exports total 17,298 metric tons (38.1 million pounds) valued at $87.1 million, an increase of 63 percent in volume and 134 percent in value versus 2007. Again, EU import data should be used, as this volume would exceed available import licenses for the HQB (high-quality beef) tariff quota of 11,500 metric tons (25.4 million pounds) for the July-June period. Daley noted that USMEF is aware of some frozen beef trade outside the HQB, but not likely to the extent reported by U.S. export data. Regardless, U.S. beef is becoming more widely distributed in the EU though exports could be pressured by falling beef prices in the rest of the world and thus the widening gap between U.S. beef prices and those from South America and Australia, heavily influenced by the strong U.S. dollar.

U.S. Pork, Beef Exports Defy Expectations – Remain High

While the U.S. agriculture community undoubtedly has been feeling the significant effects of the global economic downturn, the export numbers for October continue to show progress over the previous year.

Pork exports in particular held up extremely well, posting the third-largest monthly volume on record that equates to a 46 percent volume increase over exports from October of 2007 and a 55.5 percent increase in value.

Specifically, pork and pork variety meat exports in October totaled 192,940 metric tons (425.4 million pounds) valued at $487 million – a new record for monthly export value. Export volume increased 18 percent over the previous month and trails only May and June of 2008 for most pork exported in a single month. For January through October, exports were up 67 percent to 1.7 million metric tons (3.8 billion pounds), with value surpassing $4.1 billion.

Erin Daley, USMEF Economist

The story for U.S. beef also remains positive. Although smaller than the summer peak, beef plus beef variety meat exports were relatively strong in October, exceeding October 2007 volume levels by 16 percent. U.S. beef and variety meat exports for the month reached 89,205 metric tons (196.7 million pounds) valued at $348.3 million, exceeding year-ago export value totals by 31.4 percent. January through October beef exports, including variety meat, increased 31 percent to 840,121 metric tons (1.8 billion pounds), with value surpassing $3.1 billion, an increase of 43 percent.

“The effects of the global economic turmoil are being felt in many markets, and these market conditions almost certainly have tempered the export numbers that we might have seen from U.S. beef and pork had the credit markets not taken such a hit,” said Erin Daley, economist for the U.S. Meat Export Federation.

“However, we are continuing to see the value and quality of U.S. exports reflected in the export numbers,” she said. “Even with the depreciation in the value of many countries’ currencies, we’re still seeing strong performance by our beef and pork products, defying many expectations. USMEF does understand that some countries are having difficulty distributing imported meat due to dampened consumer demand. This is especially critical in areas like China, with large stocks of frozen pork, and Korea with large volumes of beef in storage. Prices were much higher, even for meat imported just a few months ago, making it difficult to sell under current market conditions.”

October pork highlights

Japan – U.S. pork continues its reign as the king of imported pork in Japan. Exports to Japan set another monthly record at 41,961 metric tons (92.5 million pounds) valued at $158.5 million. For the year, U.S. pork exports are up 27 percent in volume to 377,632 metric tons (832.5 million pounds) valued at $1.29 billion, an increase of 35 percent. Japan accounts for 31 percent of the total value of U.S. pork exports and, when only muscle cuts are measured, Japan accounts for 39 percent of U.S. pork export value.
Mexico – Exports to Mexico also set a new record for the month at 39,826 metric tons (87.8 million pounds), surpassing the July record and rebounding 35 percent from lower September volumes. Mexico was the second-largest destination for U.S. pork for the month, but trails China/Hong Kong for year-to-date totals. During the first nine months of 2008, exports to Mexico stand at 307,056 metric tons (676.9 million pounds) valued at $549.6 million, an increase of 38 percent in volume and 52 percent in value over last year.
Russia – despite the credit crisis, the depreciation of the ruble, falling oil prices and general economic uncertainty, Russia set another record for U.S. pork and variety meat imports in October at 31,744 metric tons (nearly 70 million pounds). Muscle cuts accounted for 17,444 metric tons (38.5 million pounds), with most likely subject to the 60 percent duty or at least 1 euro/kg. This would equate to over-quota duties of nearly $27 million in October and in excess of $140 million for the first 10 months of the year.

Total pork exports to Russia for the year have surpassed 200,000 metric tons (441.7 million pounds) valued at $435.5 million, a 173 percent increase in volume and 184 percent increase in value. Muscle cuts have accounted for nearly 70 percent of U.S. pork exports to Russia.

According to Russian import data, Russia surpassed the United States as the largest importer of beef in the world with 677,226 metric tons (1.5 billion pounds) of imports. During the first nine months of 2008, Russia reported that it imported about 2.3 million metric tons (5.1 billion pounds) of poultry, pork and beef during, trailing only China/Hong Kong (2.8 million metric tons or 6.2 billion pounds) as the largest meat importing region in the world. “Meat trade flow in 2009 will largely depend on production, prices and consumer demand in China and Russia,” Daley said.

China/Hong Kong – pork exports to this region remain above 2007 volumes, buoyed by continued strength in variety meat exports, with the majority of product going to Hong Kong. October exports totaled 27,361 metric tons (60.3 million pounds), up 21 percent from September and 15 percent from a year ago. Total 2008 exports equaled 357,962 metric tons (789.2 million pounds) valued at $618.4 million, a 178 percent increase in volume and 209 percent increase in value.

Daley noted that China’s domestic production growth, corresponding pork prices and consumer demand, given the economic slowdown, will determine pork exports to the region during 2009. “Thus far it appears that Chinese production continues to increase, with greater hog productivity given investment in commercial farms,” she said, “yet production profitability has fallen with the decline in hog prices and many producers are likely operating just around breakeven. Therefore, the incentive for further production growth in 2009 could be hampered by relatively lower profitability. Consumer demand also is expected to be sluggish through the winter and reported stocks of frozen imported pork are still weighing on the market.”

Canada – October’s exports dipped below 2007 levels, but export totals of 13,755 metric tons (30.3 million pounds) were relatively steady compared to previous months in 2008. For the year (January through October), exports totals of 139,672 metric tons (307.9 million pounds) are up 18 percent from last year. Canada’s official challenge of COOL combined with the weak Canadian dollar, lower hog numbers and smaller live hog exports to the United States will influence trade in 2009, Daley said.
South Korea – exports in October were 10,283 metric tons (22.7 million pounds), a 24 percent increase over October of 2007 and 10 percent above the prior month. Exports for the first 10 months of 2008 were up 48 percent to 112,281 metric tons (247.5 million pounds) valued at $240.4 million, a 33 percent increase over last year.
ASEAN – exports to this region were fairly strong at 3,500 metric tons (7.7 million pounds) in October, led by 2,262 metric tons (nearly 5 million pounds) to the Philippines. While these volumes are well below the summer peak, they remain 106.5 percent above October 2007 for the region with exports to the Philippines up 137 percent. For the 10-month period, exports to the region were up 350 percent to 50,479 metric tons (111.3 million pounds), equaling a 364 percent hike in value to $99.8 million. Export volume in the region thus far in 2008 has grown 232 percent in the Philippines, 967 percent in Vietnam and 364 percent in Singapore.
European Union – pork muscle cut exports to the EU-27 totaled 5,302 metric tons (11.7 million pounds) in October, more than double last year’s volume, putting the 2008 10-month total at 44,568 metric tons (98.3 million pounds) valued at $121.6 million. Once again, USMEF stresses the importance of analyzing EU import data for a more accurate estimate of trade between the U.S. and the EU. EU import data is only available through August, but imports are reported at about half of the export volumes reported by the United States, still a 167 percent increase over last year.

October beef highlights

Mexico – beef exports to the largest U.S. beef export market fell again in October, down 22 percent from the prior month and 27 percent from a year ago. Still, exports for the first 10 months of 2008 remain up 14 percent at 339,137 metric tons (747.7 million pounds). Those same exports were valued at $1.2 billion, a 21 percent increase in value. Daley noted that the weak Mexican peso has more than offset the decline in U.S. beef prices, making round cuts more expensive than this summer, when prices peaked in U.S. dollar terms.
Canada – exports to our No. 2 trading partner also declined again in October to 13,150 metric tons (29 million pounds), down 17 percent from September and 20 percent from a year ago. Totals for 2008 remain up 25 percent in volume to 133,005 metric tons (293.2 million pounds) valued at $623.2 million, a 28 percent rise. Daley expects that the weak Canadian dollar, fewer live cattle exports to the United States and the COOL implications will continue to influence beef trade with Canada.
Japan – exports here rebounded some in October to 7,170 metric tons (15.8 million pounds), the largest volume since July. January through October exports were up 63 percent to 64,679 metric tons (142.6 million pounds) valued at $333 million, a 61 percent jump in value over 2007. When compared to the first 10 months of 2003, beef exports to Japan in 2008 are equivalent to 20 percent of export volume and 28 percent of export value.

“Since the yen is basically the only currency that is strong relative to the U.S. dollar at this time, exports to Japan should continue at a strong pace, though limited by a smaller number of cattle under 21 months of age being processed through the winter months,” Daley said.

South Korea – the second-largest destination for U.S. beef exports in October, South Korea imported 15,561 metric tons (34.3 million pounds) of beef and variety meat valued at nearly $83 million, down slightly from September totals. For the year, exports weighed in at 46,946 metric tons (103.5 million pounds) valued at nearly $245 million, up 87 and 107 percent, respectively, compared to last year.

“With the three major retailers resuming U.S. beef sales since Thanksgiving, U.S. beef is finally moving into the Korean market in significant volumes,” Daley said. “Unfortunately, Korea has been hit especially hard during the global financial crisis, with the won losing about 30 percent relative to the U.S. dollar over the past few months, although the won is rebounding slightly in December. Luckily U.S. beef is a high quality, affordable option for Korean consumers, at a much lower price than domestic Hanwoo beef.”

ASEAN – this region continues to import at a healthy rate: 5,363 metric tons (11.8 million pounds) in October, up 46 percent compared to last year. Total 2008 volume is up 261 percent to 45,083 metric tons (99.4 million pounds) valued at $137 million, up 325 percent. Vietnam is still taking the majority of the beef, accounting for 33,969 metric tons (74.9 million pounds) for the year and 4,348 metric tons (9.6 million pounds) in October. Thus far in 2008, exports to Vietnam are up 318 percent in volume and 500 percent in value, reaching $107.2 million.
Middle East – exports rebounded 28 percent in October from the previous month. Compared to October 2007, exports are still down 15 percent in volume but are up 17 percent in value. For the year, exports are down 5 percent in volume (76,122 metric tons or 167.8 million pounds) but up 33 percent in value to $121.9 million. Egypt still accounts for the bulk of export volume, mainly livers, with growing beef markets in the UAE and Saudi Arabia.
Russia – while reduced from the previous three months, U.S. beef exports to Russia continued in October at 6,929 metric tons (15.3 million pounds), mainly comprised of variety meat. Total 2008 exports were 43,671 metric tons (96.3 million pounds), of which 15,438 metric tons (34 million pounds) were muscle cuts compared to just 3,568 metric tons (7.9 million pounds) in all of 2003.
Taiwan – exports in October of 1,817 metric tons (4 million pounds) were about even with September volumes and lower than the large volumes seen earlier in the year. January through October exports of 23,021 metric tons (50.7 million pounds) already have set a new annual record for beef exports to Taiwan, and are up 29 percent from last year to date. Daley noted that buying pressure from Korea has led to higher U.S. beef prices. When combined with larger beef inventory volumes and weaker consumer demand, these factors have pressured U.S. beef export volumes to Taiwan. This trend is expected to continue, likely with increased competition from Australian beef.
European Union – October exports to the EU were the largest yet this year at 1,947 metric tons (4.3 million pounds). Year-to-date exports total 17,298 metric tons (38.1 million pounds) valued at $87.1 million, an increase of 63 percent in volume and 134 percent in value versus 2007. Again, EU import data should be used, as this volume would exceed available import licenses for the HQB (high-quality beef) tariff quota of 11,500 metric tons (25.4 million pounds) for the July-June period. Daley noted that USMEF is aware of some frozen beef trade outside the HQB, but not likely to the extent reported by U.S. export data. Regardless, U.S. beef is becoming more widely distributed in the EU though exports could be pressured by falling beef prices in the rest of the world and thus the widening gap between U.S. beef prices and those from South America and Australia, heavily influenced by the strong U.S. dollar.

U.S. Pork, Beef Exports Defy Expectations – Remain High