USMEF: Beef Exports Reflect Tough Economic Climate

Despite the prolonged slowdown in global economic activity and the initial wave of A-H1N1 Influenza-related market reactions, exports of U.S. pork and beef held up reasonably well in the month of April, according to the U.S. Meat Export Federation.

While pork plus pork variety meat exports declined by 10% in volume compared to April 2008, the drop in value was limited to about 4%. For the first four months of the year, pork export volume (648,063 metric tons or 1.43 billion pounds) is about 3% above the record pace of 2008, and the value has increased about 6% to $1.495 billion.

April beef plus beef variety meat exports declined 1.4% in volume and by 6% in value compared to last year. For the first four months of the year, beef export volume has increased 2% to 277,019 metric tons (610.7 million pounds) but declined slightly in value to $937 million.

"The good news is that in spite of the turmoil we saw in the latter part of the month, April pork exports were not down as much as had been predicted given the continued economic slump,” said USMEF President and CEO Philip Seng. "But while international markets are still a relative bright spot for the pork industry, we know they're one part – and an important part – in the profitability of the U.S. pork industry. USMEF's team around the world is focused on expanding export opportunities and helping to provide the kind of momentum hog producers need right now.

"The trade environment for beef was not directly impacted by A-H1N1 Influenza as much as it was for pork,” Seng said. "But anytime consumer activity takes such a major hit, beef trade is likely to suffer. I believe U.S. beef will perform well this year, but we need to see an economic rebound in key markets like Mexico, South Korea and Taiwan, and the industry also needs expanded access in many of these markets so we can move a wider range of cuts.”

Specifically, the beef industry is working with trade officials to gain access for U.S. beef in Taiwan that includes bone-in cuts and variety meat. The industry is also seeking relief from the 21-month age limit for cattle from which beef is eligible for export to Japan. Beef exports from four states – Illinois, Texas, Washington and Wisconsin – have also been suspended temporarily by Russia.

Beef exports to Canada, Mexico remain sluggish, but decline is offset by other markets

Exports to Mexico and Canada - the top two markets for U.S. beef in 2008 – continue to struggle due to a number of factors. Exchange rates are far less favorable than last year and the down economy – especially in Mexico – has steered consumers toward lower-priced proteins. As a result, beef exports to Mexico are down more than 20% in volume and value compared to the first four months of last year.

In Canada, U.S. beef exports have declined about 10% in volume and 16% in value compared to 2008. While a decline in live cattle imports from Canada to the United States might suggest an increase in domestic supply, Canada's cattle slaughter is actually down about 2% from last year. This reflects a continued contraction in the Canadian cattle herd, which may bode well for increased beef exports to Canada once more favorable economic conditions return.

The ASEAN region has been a mainstay for U.S. beef exports this year, and April was no exception. Exports to the region increased by 72% in volume and percent in value over April 2008. Led by a surge in activity in Vietnam, exports to the ASEAN region have increased by 63% in volume (to 26,030 metric tons or 57.4 million pounds) and 93% in value (to $84.3 million) over January-April of last year.

Japan continues to regain strength as a destination for U.S. beef, with April exports climbing by 10% over April 2008. For the first four months of the year, beef exports to Japan have increased by about 25% in both volume and value compared the same period last year, totaling 19.914 metric tons (43.9 million pounds) valued at about $106 million.

Complete April export statistics for pork, beef and lamb can be found online on USMEF's statistics page.