March 8, 2017 Comments are off Montana Stockgrowers Association
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Strong Finish for 2016 Red Meat Exports

U.S. pork and beef exports wrapped up an excellent 2016 performance with very strong December results, according to statistics released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

Pork export volume reached a record 2.31 million metric tons (mt) in 2016, up 8 percent year-over-year and 2 percent above the previous high in 2012. Export value increased 7 percent from a year ago to $5.94 billion. December pork exports totaled 222,635 mt, up 18 percent year-over-year, valued at $564.2 million, up 20 percent.

Exports accounted for 25.8 percent of total 2016 pork production and 21.5 percent for muscle cuts – up from 24.2 percent and 20.8 percent, respectively, in 2015. December ratios were 28 percent for total production and 23 percent for muscle cuts only – up significantly from December 2015. Export value per head slaughtered averaged $50.20 in 2016, up 4 percent from the previous year. The December average was $56.06, up 24 percent.

Beef exports increased 11 percent in volume (1.19 million mt) and 1 percent in value ($6.34 billion) from 2015. December exports totaled 116,847 mt, up 24 percent year-over-year. This was the largest monthly volume since July 2013 and the largest ever for December. Export value was $619.1 million in December, up 22 percent.

Exports accounted for 13.7 percent of total beef production in 2016 and 10.5 percent for muscle cuts – up from 13.1 percent and 10 percent, respectively, in 2015. December exports accounted for 15.6 percent of total December beef production and 12.1 percent for muscle cuts only – each up more than 2 percentage points from a year ago and the highest since 2011. Export value per head of fed slaughter averaged $262.17, down 6 percent from 2015, but the December average was $301.97 – up 14 percent and the highest in nearly two years.

Pork to Mexico sets fifth straight volume record; China/Hong Kong also record-large 

A remarkable second half pushed 2016 pork export volume to Mexico to its fifth consecutive record at 730,316 mt – breaking the previous record by 2 percent. Export value to Mexico totaled $1.36 billion, up 7 percent year-over-year and the second-highest on record, trailing only the $1.56 billion mark reached in 2014.

“At this time of record-large pork production, it would be hard to overstate the importance of Mexican demand to the U.S. industry,” said Philip Seng, USMEF president and CEO. “This is especially true for hams, as we are locked out of Russia – once a large destination for U.S. hams – and China’s demand for imported hams has moderated in recent months. So now more than ever, we need strong demand from our key customers in Mexico, and they have responded with extraordinary results. December exports to Mexico accounted for nearly $16 per head, and that’s absolutely critical to the entire U.S. pork supply chain.”

Though down from the high levels seen earlier in the year, December pork exports to China/Hong Kong were still up 40 percent year-over-year in volume (47,242 mt) and 42 percent higher in value ($96 million). For the full year, exports to China/Hong set a new volume record of 544,943 mt (up 61 percent) and broke the $1 billion mark for the first time ($1.07 billion, up 53 percent).

Other 2016 highlights for U.S. pork exports include:

  • Japan remained the leading value destination for U.S. pork, though exports fell 5 percent in volume (387,712 mt) and 2 percent in value ($1.56 billion) compared to 2015. However, chilled exports to Japan set a new record of 218,211 mt, up 8 percent.
  • Led by a record performance in Central America and a fourth-quarter surge in Colombia and Chile, exports to the Central/South America region increased 11 percent in volume (135,954 mt) and 9 percent in value ($334.5 million).
  • Pork shipments increased to both Australia and New Zealand, as export volume to Oceania reached 69,963 mt (up 10 percent) valued at $197.3 million (up 3 percent).
  • Exports to the Dominican Republic set another record in 2016, topping the previous year’s totals by 10 percent in volume (25,591 mt) and 6 percent in value ($56.4 million).
  • Fueled by increases in China/Hong Kong and Canada and steady exports to Mexico, pork variety meat exports jumped 20 percent in volume to 523,199 mt and 24 percent in value to $999 million – just short of the record levels reached in 2014.

Asian markets drive strong beef export growth 

Driven by strong demand for higher-value chilled cuts, beef exports achieved new value records in South Korea and Taiwan in 2016, and rebounded strongly in Japan.

In Korea, December beef exports soared by 81 percent in volume (20,333 mt) and 88 percent in value ($130 million) from a year ago, capping a remarkable year in which exports totaled 179,280 mt (up 42 percent) valued at $1.06 billion – up 31 percent from a year ago and breaking the previous value record by more than 20 percent. Korea’s per capita beef consumption set a new record in 2016 of 34 pounds (carcass weight) – so the U.S. not only gained market share, but also capitalized on the market’s overall growth.

Beef exports to Taiwan were also strong in December, with export value ($43.3 million) hitting its highest level ever. Full-year exports to Taiwan were up 25 percent in volume to 44,053 mt and 14 percent in value to $362.8 million.

2016 exports to Japan were the largest of the post-BSE era at 258,653 mt, up 26 percent year-over-year. Export value totaled $1.51 billion, up 18 percent. Chilled beef exports to Japan totaled 112,334 mt, up 44 percent from 2015.

“In addition to the strength of the U.S. dollar, U.S. beef overcame other severe challenges in these north Asian markets and achieved remarkable results,” Seng said. “Despite facing higher tariff rates in Japan compared to Australian beef, U.S. beef displaced its competition and won back significant market share. And the investment the U.S. industry made to rebuild consumer confidence in Korea is paying tremendous dividends, especially in the retail sector. We’re seeing U.S. beef featured regularly by retailers who were once reluctant to carry the product.”

Other 2016 highlights for U.S. beef included:

  • Beef exports to Mexico increased 7 percent year-over-year in volume to 242,373 mt, though value fell 11 percent to $974.9 million. While challenged by a weak peso, Mexico remains a key destination for muscle cuts such as shoulder clods and rounds, as well as for beef variety meat.
  • Led by strong growth in Chile and a doubling of exports to Colombia, beef exports to South America increased 6 percent in volume to 22,810 mt, valued at $92.7 million (down 2 percent). The region should see further growth in 2017 with the reopening of Brazil.
  • Exports to Central America were up 7 percent in volume (12,745 mt) with top market Guatemala up 1 percent and exports to Honduras nearly doubling. Export value was $71.8 million, up 1 percent.
  • Fueled by a resurgence in Indonesia and solid growth in Vietnam, beef exports to the ASEAN region were up 41 percent in volume (29,920 mt) and 15 percent in value ($156.9 million). Indonesia expanded access for U.S. beef in early August. Despite being closed to many products through the first seven months of the year, U.S. exports to Indonesia set a new value record of $39.4 million.
  • Beef variety meat exports increased 10 percent in volume (341,433 mt) and 4 percent in value ($902.2 million) in 2016. Liver exports increased 12 percent to 81,727 and reached a broader range of markets. While liver exports to Egypt – the largest destination for U.S. livers – increased 4 percent, further growth was achieved in Central and South America and with the reopening of South Africa to U.S. beef.

Lamb muscle cut exports continue upward trend 

Although U.S. lamb exports were down in 2016, this was largely due to a sharp decline in variety meat exports. While total exports fell 11 percent in volume (8,248 mt) and 4 percent in value ($18.3 million), muscle cut exports increased 26 percent (2,239 mt) and 16 percent ($12.3 million) respectively. Leading market Mexico followed a similar pattern, as variety meat exports declined significantly, but muscle cut exports increased 9 percent in volume (965 mt) and 1 percent in value ($2.8 million). Emerging markets showing promise in 2016 included Bermuda, the Philippines, Vietnam and the United Arab Emirates.

Complete January-December export results for U.S. beef, pork and lamb are available from USMEF’s statistics web page.

If you have questions, please contact Joe Schuele at [email protected] or call 303-547-0030.

NOTES:

  • Export statistics refer to both muscle cuts and variety meat, unless otherwise noted.
  • One metric ton (mt) = 2,204.622 pounds.

Source: USMEF

February 27, 2017 Comments are off Montana Stockgrowers Association
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Costco Expansion Provides Even Greater Momentum for U.S. Beef in Korea

U.S. beef has been rapidly building momentum in South Korea, and received a further boost this week as Costco officially began converting its imported chilled beef selection from Australian beef to 100 percent U.S. product. The move follows a multi-year effort by the U.S. Meat Export Federation (USMEF) to persuade store managers that sales of U.S. beef – a popular item at Costco – would match or exceed Australian beef sales due to revived consumer confidence in the safety of U.S. beef.
Costco currently has 13 warehouses in Korea, with two new locations scheduled to open this year. On Feb. 13, Costco began transitioning two of those warehouses to 100 percent U.S. chilled beef. The others will be converted in May.

In total, Costco’s move represents an opportunity for about 15,000 metric tons (mt) of incremental new beef business in 2017, said Jihae Yang, USMEF director in Korea. Yang noted that the theme of U.S. beef promotions in Korea has gradually moved from food safety to consumer enjoyment and product quality.
“While USMEF still reassures Korean consumers that U.S. beef is a safe product, we are now able to focus more on the outstanding flavor of U.S. beef,” Yang said. “Tasting demonstrations at Costco and other popular stores have been very successful in getting consumers to taste U.S. beef and increase awareness of our product.”

USMEF is also providing support to Costco to ensure a smooth transition to U.S. chilled beef, helping re-acquaint customers with the full range of U.S. beef cuts.
“Korean consumers love the high quality of U.S. beef and really enjoy the flavor of our product,” added Dan Halstrom, USMEF senior vice president for marketing. “In Korea, Costco is the gold standard when it comes to imaging food products, especially beef. USMEF, along with our partners in the U.S. beef industry, have been working hard to recapture market share in Korea. We’ve been able to do that, but mostly on the frozen side. The marquee items at Costco are the chilled beef cuts and we finally have that chilled section of the meat case back.”

U.S. beef exports to Korea totaled 179,280 mt in 2016, up 42 percent year-over-year. Export value reached $1.06 billion, up 31 percent from a year ago and breaking the previous value record (from 2014) by 25 percent. Chilled beef exports to Korea totaled 24,572 mt in 2016, up 47 percent year-over-year, valued at $216.4 million (up 43 percent).

U.S. beef captured 42 percent of Korea’s imported beef market in 2016, up from 35 percent the previous year, while Australia’s market share fell from 57 percent to 49 percent. But Yang notes there is still room for further growth, citing pre-BSE data from 2003.

“Prior to the December 2003 market closure, U.S. beef accounted for the majority of imported beef sales in Korea and 49 percent of total sales – including domestic beef,” she explained. “So while U.S. beef has made excellent progress in Korea, the market still holds strong growth opportunities.”

Korea’s per capita beef consumption set a new record in 2016 at more than 25 pounds (product weight), up about 5 percent year-over-year and increasing by one-third since 2009 – so U.S. beef is not only gaining market share, but also contributing to growth in overall consumption. Korea’s demand for imported beef remains strong, and based on customs clearance data U.S. beef topped Australian beef in Korea’s January imports, continuing a trend that began late last year.

“Regaining Costco’s chilled beef business is a milestone on several fronts,” says Joel Haggard, USMEF senior vice president for the Asia Pacific region. “Not only will U.S. sales soar at this iconic beef retailer, but Costco’s beef merchandising decisions are a bellwether for overall Korean consumer sentiment toward U.S. beef.”

Source: U.S.M.E.F.