A weak U.S. dollar and higher year-over-year production levels have resulted in U.S. beef exports continuing well above year-ago levels. Exports through July are 27 percent higher, year-over-year. Strong export growth continues to many of the United States’ top beef export markets, including Canada (+36 percent), Japan (+44 percent), and Korea (+56 percent). Exports to Mexico are fractionally below year-earlier levels. Exports to these four countries combined have accounted for 68 percent of total U.S. beef exports through July. Strong year-over-year export growth has also continued to Hong Kong (+54 percent), Russia (+56 percent), and Egypt (+30 percent).
The U.S. dollar has weakened against the currencies of major U.S. beef importing countries, most notably over the past year, and has facilitated much of the growth in exports. The Japanese yen reached a new low against the U.S. dollar in August at 76.40 yen per USD and averaged 76.97 yen per USD for the month, also a low. The South Korean won was also at the lowest levels this summer (1057.85 won per USD) since August 2008. The won strengthened slightly in August to average 1075.85 won per USD.
While the exchange rate has been favorable to U.S. exports and will remain relatively weak, more beef has also been available for export. Drought in the Southern half of the United States has prompted U.S. producers to continue culling herds. Cattle have been pulled forward into feedlots, a trend that has been in place for most of the past year, elevating production levels in the short term. U.S. beef export levels are expected to remain elevated through the third quarter, as a relatively larger amount of beef will remain available for export. Third-quarter growth is forecast at 24 percent. Export levels for the fourth quarter are expected to be fractionally below year-earlier levels as the U.S. beef supply begins to tighten into 2012. Total U.S. beef exports for 2011 are forecast at 2.71 billion pounds, 18 percent higher year-over-year.