U.S. red meat exports kicked off 2014 on a “positive note,” although market conditions suggest the year ahead could be “challenging,” according to statistics released by the U.S. Department of Agriculture and compiled by the U.S. Meat Export Federation.
“Higher U.S. pork and beef prices will create challenges for American red meat exports in the months ahead, particularly in markets where customers are more price sensitive,” USMEF said in a written statement.
In January, U.S. beef exports rose 13 percent year-over-year in volume, reaching 97,824 metric tons, and 16 percent in value, totaling $514.5 million. The gains were fueled by double-digit growth to Mexico, Japan and Hong Kong, as well as “solid” growth in Central and South America, offsetting drops in exports to Canada and South Korea and a decline in the value of exports to the Middle East, USMEF said.
Monthly exports to Mexico, the top volume and value market for U.S. beef, jumped 23 percent year-over-year in volume to 20,228 metric tons and 27 percent in value to $93.6 million. Exports to Japan, the No. 2 market for U.S. beef in terms of volume and value, reached 15,655 metric tons, surging 53 percent, which were valued at $92.9 million, up 28 percent.
In addition, U.S. beef exports to Hong Kong, the fifth largest market for U.S. beef, equaled 12,811 metric tons in January, spiking 83 percent versus January 2013, valued at $80.9 million, surging 118 percent. Exports to Central and South America rose 26 percent to 2,843 metric tons valued at $12.4 million, up 32 percent, led by double-digit volume and value increases in exports to Chile and Colombia.
USMEF also noted that the reemerging Indonesia market was the eighth largest single-country destination for beef exports by volume, which rose 3,314 percent year-over-year to 1,741 metric tons, continuing the “strong” pace that started in October 2013 following improved market access conditions. Indonesia, the world’s 16th largest economy, could become the world’s seventh largest economy by 2030, with potential growth of 7 percent a year, according to McKinsey & Co.
Philip Seng, USMEF president and CEO, said that U.S. beef production, which is already running below last year’s levels, is expected to drop 5 percent this year, which will make it challenging to maintain export levels. The U.S. Department of Agriculture’s National Agricultural Statistics Service reported that the inventory of U.S. beef cows declined to 29.0 million as of Jan. 1, 2014, down 1 percent year-over-year, the seventh consecutive annual decline.
Beef cow slaughter declined “significantly” in the last half of 2013 because drought conditions in many areas improved and feed costs moderated, so herd restocking began in areas where grazing conditions allowed for it, according to Farm Forum.
Pork exports in January increased 3 percent year-over-year in volume and 2 percent in value, driven by growth to Mexico and the largest export volume to Japan since October 2012.
Monthly exports to Mexico, the top volume market for U.S. pork, increased 9 percent year-over-year to 59,825 metric tons valued at $113.2 million, up 10 percent. Exports to Japan, the No. 2 market for volume and the top market for value, reached 39,068 metric tons, rising 4 percent, valued at $163.4 million, down 6 percent.
Pork sales to the Hong Kong and China region, the third-largest market for U.S. pork exports in terms of volume and value, were relatively flat in volume versus last January, but rose 15 percent in value. The Central and South America region was up “sharply,” jumping 74 percent in volume and 79 percent in value, driven by triple-digit growth to Colombia; exports to that nation surged 258 percent and value spiked 270 percent. In addition, the Oceania and ASEAN regions posted “solid” increases, USMEF said.
“In pork, there are a number of recognized challenges on the production side, as well as unresolved access issues,” said Philip Seng, USMEF president and CEO. “In addition, we are also seeing increased competition in the form of higher marketing budgets and favorable prices for the EU, Brazil and Canada.”
According to the USDA’s Outlook for Livestock and Poultry in 2014 report, although conditions are “favorable” for an expansion in pork production, the outbreak and continued spread of the porcine epidemic diarrhea virus is expected to limit the sector’s ability to expand the herd and provide a base for increased slaughter. However, Russia, which banned U.S. pork and other meat products in February 2013 because of concerns over the use of the feed additive ractopamine, is considering lifting its ban, Global Meat News reports.