The dramatic beef production disruptions in the second quarter continued to be reflected in the latest data for July. Beef exports, which dropped 31 percent year over year in May and 33 percent in June, increased sharply from June to July but remained 8 percent lower year over year. The weekly data suggests that exports continued to recover in August, likely up year over year.
July beef exports to Japan were down just 2.0 percent year over year and remain 4.3 percent higher for the year to date through July. Beef exports to South Korea were down 3.9 percent year over year in July and are down 6.8 percent for the year to date.
Japan and South Korea are the two largest beef export markets and represent 54.4 percent of total beef exports for the first seven months of 2020. Canada is now the number three beef export market with July exports up 10.7 percent year over year and year to date exports up 11.8 percent. Mexico has dropped to number four with exports down 51.7 percent in July compared to last year and down 39.8 percent so far in 2020.
Beef exports to Hong Kong were up 14.7 percent in July but are down 5.0 percent for the year to date. July exports to Taiwan were up 8.5 percent year over year but are down 4.7 percent for the year through July. Hong Kong and Taiwan each represent 6.7 percent shares of total year to date beef exports. Beef exports to China in July were up 125.9 percent over last year and are up 81.5 percent year over year for the year to date. China represents 1.6 percent of total beef exports so far in 2020.
Beef imports spiked higher in July, up 41.1 percent year over year and pushing the year to date total up 8.5 percent compared to the first seven months last year. Beef imports were up from each of the four largest beef import sources. Canada, the largest source of beef imports, was up 12.7 percent in July but is down 5.8 percent for the year to date.
Mexico was up 34.3 percent in July compared to last year and is up 25.5 percent so far this year. Mexico now exceeds Australia as the number two source of U.S. beef imports. Australia was up 17.1 percent year over year in July but is down 2.7 percent for the year to date. New Zealand was up 94.2 percent in July and is 13.3 higher for the year to date. So far in 2020, Canada and Mexico account for 44.3 percent of total beef imports and combined with Australia and New Zealand, the top four source represent 82.4 percent of total beef imports.
Currency exchange rates are important factors affecting international beef trade. Since the COVID-19 impacts began in mid-March, the U.S. dollar has been significantly stronger compared to the Argentinian, Brazilian and Mexican currencies and somewhat stronger against the Canadian, Australian and New Zealand dollars. A strong U.S. dollar is a headwind for beef exports and favors beef imports. The U.S. dollar has weakened slightly against the Japanese Yen, and the Hong Kong dollar, which does help support beef exports to those two major markets.
Continuing COVID-19 impacts, global recession, political tensions and exchange rates will all be important in determining global beef trade in the coming weeks and months.