After an encouraging performance in April, exports of U.S. beef lost momentum in May, falling below year-ago levels in both volume and value, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF), a contractor to the beef checkoff.
Beef exports moved counter-seasonally lower in May, dropping 14 percent from a year ago to 195 million pounds. Export value dipped year-over-year for the first time since January, topping out at $556.7 million (down 6 percent). Nonetheless, for the combined first five months of 2015, export value remained 2 percent ahead of last year's pace, at $2.68 billion. Meanwhile, beef-export volume for the five-month period totaled 948.9 million pounds, down 10 percent from the same period in 2014.
January-through-May beef exports equated to 13 percent of total beef production and 10 percent for muscle cuts only – down from 14 percent and 10.6 percent, respectively, last year. Still, export value per head of fed slaughter averaged $291.70, up 9 percent from a year ago.
Korea a bright spot for U.S. beef
Beef exports to South Korea remained strong in May, increasing 5 percent in volume from a year ago, at 21.5 million pounds, and 11 percent in value to $64.8 million. This pushed January-through-May exports to Korea 4 percent higher in volume to 107 million pounds and 9 percent higher in value to $341.9 million. The market could see a short-term slowdown; however, due to the toll that the recent outbreak of Middle East respiratory syndrome (MERS) has taken on consumer spending in Korea. MERS was first diagnosed in Korea on May 20, but became a major public health concern in early June.
“Although MERS is not a food safety issue, its impact on Korea’s restaurant sector was dramatic in June,” said Philip Seng, USMEF President and CEO. “Fortunately, our staff in Korea reports that the situation has improved significantly this month, with consumer activity beginning to return to normal. We expect beef demand in the Korean market – which is one of our strongest performers in 2015 – to rebound fairly quickly.”
Another bullish factor is Korea’s domestic beef prices, which soared to near-term highs in June, reflecting relatively tight supplies.
Results for U.S. beef in other Asian markets have been mixed so far in 2015, with most struggling to keep pace with last year’s import volumes. Export volume to Japan slumped in May, falling 10 percent from year-ago levels, at 39.6 million pounds, and 15 percent in value to $106.9 million. Through May, export volume to Japan remained 2 percent ahead of 2014, at 196 million pounds, and export value was up 3 percent to $564.6 million.
Other January-May results for U.S. beef included:
- Exports to Hong Kong fell 17 percent in volume (108.6 million pounds) and 8 percent in value ($370.4 million).
- Export value to Taiwan managed a solid increase ($117.5 million, up 13 percent) despite a 5 percent decline in volume (27.2 million pounds).
- Although exports to the ASEAN region were down 23 percent in volume (20.2 million pounds), export value was still up 14 percent to $63.5 million. Major destinations performed well, with exports exceeding year-ago levels to the Philippines, Vietnam and Singapore. The regional drop in export volume was mostly due to a sharp decline in exports to Indonesia (1.4 million pounds, down 85 percent), driven in large part by restrictive import regulations and a severely weakened currency.
While beef export value has managed to stay in positive territory in most Asian markets, Seng cautions that the U.S. industry faces a volatile business climate.
“Lack of access to China, which never reopened after the 2003 BSE case, is definitely holding back our export growth,” he said. “China is a burgeoning market that impacts prices and product flow throughout a large region, and its influence on global beef trade is growing rapidly. Exporting to China would significantly expand the presence of U.S. beef in Asia, but we remain on the sidelines as our competitors gain a stronger foothold.”
Just four years ago, China’s beef imports totaled only $112 million for an entire calendar year. Through May of this year, imports exceeded $700 million – up 17 percent from the record pace of 2014. Primary suppliers are Australia, Uruguay, New Zealand and Argentina.
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