“With higher operating costs, both the pork and beef sectors are facing serious economic challenges,” said USMEF President and CEO Philip Seng. “Tight beef supplies have pushed prices higher and strong demand from our international customers is helping support higher beef cutout values. On the pork side, an increase in U.S. production has been offset by larger exports, helping drive the pork cutout to its peak in late June. With these factors in mind, it is absolutely critical that we remain aggressive with our international promotions and continue to capture the highest return possible on the products we export. Our pork and beef export value totals continue to outpace last year’s records, which is certainly a positive sign.”

While July beef export volume (108,971 metric tons) was 9.5 percent lower than a year ago, it was the largest monthly volume of 2012 and up 16 percent from June. Export value in July ($513.5 million) was slightly higher than a year ago and up 11 percent from June. Year-to-date exports through July remained 11 percent below the record pace of 2011 in volume (659,433 mt) but increased 4 percent in value to $3.17 billion.

July beef exports equated to 11 percent of production for muscle cuts and 14.3 percent when including variety meat. The respective ratios for January through July were 9.8 percent and 12.8 percent. Beef export value per head of fed slaughter totaled $235.18 in July – down less than 1 percent from the record set in July 2011. For January through July, per-head export value averaged $212.73 – topping last year’s pace by 7 percent.

Several key beef exports markets posted increases in value for January through July despite lower volumes, including: Canada (-12 in volume to 97,326 mt, +7 percent in value to $639.3 million), the Middle East (-5 percent to 91,348 mt, +8 percent to $201.5 million), Japan (-3 percent to 91,132 mt, +19 percent to $600.2 million) and the ASEAN region (-6 percent to 38,502 mt, +14 percent to $160 million).

Markets posting increases in both volume and value included Russia (+7 percent to 44,461 mt and +38 percent to $184.7 million) and Central and South America (+35 percent to 20,458 mt and +79 percent to $76.1 million). Exports to Hong Kong were steady in volume at 29,776 mt and up 22 percent in value at $161.7 million.

A weak peso continued to create a tough business climate for U.S. beef in Mexico, which remained the largest volume destination (122,056 mt) but slipped to third in value (behind Canada and Japan) at $518.3 million. A weak economy and large domestic supplies hurt exports to Korea, which were 22 percent lower in volume (76,559 mt) through July and down 18 percent in value ($353.6 million). Exports to Taiwan have been hit hard by regulatory restrictions – down 65 percent in volume (6,755 mt) and 58 percent in value ($43.4 million). However, Taiwan’s recent establishment of a maximum residue level for ractopamine is expected to create a more favorable business climate for the remainder of this year.