October meat exports better, but still down from a year ago

October meat exports better, but still down from a year ago

U.S. pork and beef exports in October edged higher than the previous month; October beef exports rebound a bit

U.S. pork and beef exports in October edged higher than the previous month, but were still down from a year ago, according to data released by USDA and compiled by the U.S. Meat Export Federation.

Pork exports were down 3% year-over-year in volume to 177,191 metric tons, and fell 21% in value to $447.8 million, reflecting lower global pork prices. Through the first 10 months of the year, exports were down 4% in volume (1.76 million mt) and were 17% lower in value ($4.65 billion).

U.S. pork and beef exports in October edged higher than the previous month; October beef exports rebound a bit (Thinkstock/ra3rn)

Similar to the previous two months, pork muscle cut exports improved significantly year-over-year in October, increasing 8% to 141,923 mt. But the total results were again held back by weak variety meat exports, which fell 31% to 35,268 mt.

October beef exports rebounded to some degree from their low September totals, but were still down 14% from a year ago in volume (94,524 mt) and fell 26% (to $508.2 million) compared to the record-high value posted in October 2014 ($687.1 million). Through the first 10 months of 2015, beef exports were down 12% in volume to 877,229 mt and were 10% lower in value at $5.28 billion.

Pork export highlights
October pork exports to Mexico edged slightly lower than a year ago but remained strong at 59,766 mt. For January through October, exports to Mexico were up 5% in volume to 589,564 mt, while export value fell 20% to $1.04 billion.

Exports to Canada improved 2% year-over-year in volume (16,689 mt) in October, while value fell 15% to $62.9 million. Despite the weak Canadian dollar, pork exports to Canada have performed relatively well this year, with January-October volume down 5% to 165,655 mt and value down 13% to $652.9 million.

October exports to China/Hong Kong improved from last year's low levels, posting the largest volume (32,899 mt, up 23%) since early 2014, while export value was down 3% to $64.3 million. November results could reveal further improvement, as eligibility to export to China was restored for several U.S. facilities near the end of October. For January through October, exports to China/Hong Kong were down 5% from a year ago in volume (271,903 mt) and 13% lower in value ($567.2 million).

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October exports also trended higher for the Philippines (4,724 mt, up 73%), Australia (3,575 mt, up 62%), the Caribbean (3,619 mt, up 15%) and Taiwan (2,162 mt, up 123%), albeit from very low levels last year.

Pork demand remains sluggish in leading value market Japan, with October exports down 10% from a year ago in volume (29,849 mt) and value falling 45% to $117.2 million. For January through October, exports were 13% below last year's pace in volume (344,609 mt) and down 19% in value ($1.34 billion). After record-large imports last year, Japan's volume from all suppliers was down 7% through October. However, its large frozen inventories have declined over the past several months and this could stimulate future demand.

January-October exports accounted for 24% of total pork production and 21% for muscle cuts only, down from 27% and 22%, respectively, during the same period in 2014. Export value per head slaughtered averaged $48.84, down 23% year-over-year.

"The slowdown in Japan and weak global demand for pork variety meat clearly represent a drag on overall exports in 2015," noted USMEF President and CEO Philip Seng. "Recent plant relistings will expand opportunities for U.S. pork in China, which is a high-volume market for variety meat. But the global pork variety meat market is intensely price-competitive, especially with very large volumes currently emerging from the European Union, which are further buoyed by the weak euro."

Beef export highlights
South Korea and Taiwan have been top performers for U.S. beef exports in 2015, but demand in these markets softened in October. Exports to Korea were down 7% in volume (10,342 mt) in October and fell 30% in value ($58.8 million). For January through October, exports to Korea were still up 7% in volume to 102,919 mt and reached $671.7 million in value, which was steady with last year's pace.

In Taiwan, October exports fell 16% in volume (2,718 mt) and 13% in value ($24 million), but January-October exports were still up 3% in volume to 29,490 mt and value remained on a record pace at $265.3 million, up 9%.

The decline in Korea and Taiwan was offset to some extent by higher October totals in the Middle East, ASEAN and Caribbean. For January through October, these regions posted the following results:

• Export volume to the Middle East was down 16% year-over-year to 96,518 mt, but value was up 8% to $246.8 million. Egypt continues to be a critical destination for U.S. livers and other variety meat, while the leading muscle cut markets are the United Arab Emirates and Kuwait.

• Led by strong exports to the Dominican Republic, the Caribbean was up 1% year-over-year in volume to 19,149 mt and 10% higher in value to $135.9 million.

• Exports to the ASEAN region were down 16% from a year ago in volume (17,452 mt) but were 7% higher in value ($115.3 million), led by substantially larger shipments to Vietnam and Singapore.

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Similar to pork, U.S. beef exports to Japan have struggled in 2015. Though Japan remains the largest value destination for U.S. beef, it slipped below Mexico in volume as January-October exports were down 15% 176,236 mt. Export value to Japan was down 18% to $1.1 billion.

"Japan's total beef imports from all suppliers are down about 6% this year, but it is noteworthy that both Australia and Mexico have made gains in Japan while imports from other suppliers are down significantly," Seng explained. "Both countries enjoy lower tariffs in Japan through their respective economic partnership agreements, and the year-to-date results certainly show the importance of this advantage."

Beef exports to Hong Kong were also well below year-ago levels through October, falling 25% in volume (92,389 mt) and 29% in value ($641.1 million). Although officials from the U.S. and China continue to discuss resumption of beef exports, China remains closed to U.S. beef.

January-October beef exports accounted for 13% of total production and 10% for muscle cuts only – each down one percentage point from the same period last year. Export value per head of fed slaughter averaged $278.06, down 5% from a year ago.

Related: September, 2015, U.S. meat exports

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