Audio: Despite Tougher Pricing Environment, USMEF Economist Expects Solid Fourth Quarter for U.S. Meat Exports
Published: Oct 25, 2011
The U.S. dollar has recently strengthened against most foreign currencies. This can affect U.S. beef and pork exports, in terms of both customer purchasing power in major export markets, and when priced against the currencies of major competitors such as Brazil, Australia and Canada.
As USMEF Economist Erin Daley Borror explains, this will make for a tougher business climate in the fourth quarter, compared to the rest of 2011. But she remains confident that U.S. exports will post a solid performance through year’s end, because global demand is strong and the pricing environment is roughly the same as it was in the final quarter of 2010. During that time, U.S. beef and pork exports achieved very solid results.
Both U.S. beef and pork exports are projected to set new value records in 2011, with each breaking the $5 billion mark for the first time ever.
TRANSCRIPT:
JOE SCHUELE: This is Joe Schuele with the U.S. Meat Export Federation Report. The U.S. dollar has recently strengthened against most foreign currencies, which makes for a tougher pricing environment for U.S. beef and pork exports. USMEF economist Erin Daley Borror explains:
ERIN DALEY BORROR: We’ve obviously had a very nice weak dollar advantage for all of 2011 until the big correction starting in September. Today, if we compare currencies back to one year ago, we’ve seen an actual appreciation in the Japanese yen and the Chinese yuan, but recent evaluation in most other import markets, especially Mexico, Korea and Russia, with purchasing power dropping as much as 10 percent for Mexico and smaller devaluations in the other countries. The swing is even more dramatic comparing values for this July when the U.S. dollar reached its most recent low point. That’s when we were at our low point of weak dollar advantage. So, if we compared those July values to current rates, the Mexican peso is actually off about 15 percent, the Russian ruble off 11 percent, and the Canadian dollar off 6 percent. But those foreign market currencies have actually strengthened back a little bit from where they were at their recent lows, which would have been in the first week of October. So we’ve seen a little stabilization.”
JOE SCHUELE: But Daley-Borror expects beef and pork exports to remain strong through the end of the year because they enjoy roughly the same competitive position as they did last year when fourth quarter exports were very strong.
ERIN DALEY BORROR: On the competitors side, the Brazilian real has had the most significant drop trading off about 13 percent from its July values. The Australian and Canadian dollars are also weaker than they were during this year, but they’re basically steady to higher than they were exactly one year ago. So in other words, U.S. beef and pork have relatively close to the same competitive positions as we had about this same time last year, when our exports had a very strong fourth quarter.
JOE SCHUELE: For more on this and other trade issues, please visit USMEF.org.
As USMEF Economist Erin Daley Borror explains, this will make for a tougher business climate in the fourth quarter, compared to the rest of 2011. But she remains confident that U.S. exports will post a solid performance through year’s end, because global demand is strong and the pricing environment is roughly the same as it was in the final quarter of 2010. During that time, U.S. beef and pork exports achieved very solid results.
Both U.S. beef and pork exports are projected to set new value records in 2011, with each breaking the $5 billion mark for the first time ever.
TRANSCRIPT:
JOE SCHUELE: This is Joe Schuele with the U.S. Meat Export Federation Report. The U.S. dollar has recently strengthened against most foreign currencies, which makes for a tougher pricing environment for U.S. beef and pork exports. USMEF economist Erin Daley Borror explains:
ERIN DALEY BORROR: We’ve obviously had a very nice weak dollar advantage for all of 2011 until the big correction starting in September. Today, if we compare currencies back to one year ago, we’ve seen an actual appreciation in the Japanese yen and the Chinese yuan, but recent evaluation in most other import markets, especially Mexico, Korea and Russia, with purchasing power dropping as much as 10 percent for Mexico and smaller devaluations in the other countries. The swing is even more dramatic comparing values for this July when the U.S. dollar reached its most recent low point. That’s when we were at our low point of weak dollar advantage. So, if we compared those July values to current rates, the Mexican peso is actually off about 15 percent, the Russian ruble off 11 percent, and the Canadian dollar off 6 percent. But those foreign market currencies have actually strengthened back a little bit from where they were at their recent lows, which would have been in the first week of October. So we’ve seen a little stabilization.”
JOE SCHUELE: But Daley-Borror expects beef and pork exports to remain strong through the end of the year because they enjoy roughly the same competitive position as they did last year when fourth quarter exports were very strong.
ERIN DALEY BORROR: On the competitors side, the Brazilian real has had the most significant drop trading off about 13 percent from its July values. The Australian and Canadian dollars are also weaker than they were during this year, but they’re basically steady to higher than they were exactly one year ago. So in other words, U.S. beef and pork have relatively close to the same competitive positions as we had about this same time last year, when our exports had a very strong fourth quarter.
JOE SCHUELE: For more on this and other trade issues, please visit USMEF.org.