First-half results encouraging for U.S. meat export value -

Beef exports in June totaled 94,119 metric tons valued at $464.4 million. The results continued this year’s pattern, with export volume significantly lower than last year’s record pace but with an increase in export value.

Through June, this year’s beef export volume was down 11 percent to 550,462 metric tons while export volume was up 4 percent to $2.66 billion. June export value equated to $203.90 per head of fed slaughter, with per-head value for the year reaching $208.88.

This is 8.5 percent higher than in the first half of last year. For the year, exports accounted for just under 10 percent of total muscle cut production and 12.5 percent when including both muscle cuts and variety meat - lower than last year’s ratios of 10.6 percent and 13.8 percent.

Beef export volume struggling, but value edges higher

Mexico remained the leading volume market for U.S. beef exports in the first half of the year but slipped to third (behind Canada and Japan) in value, totaling 103,751 metric tons valued at $446 million. These totals were down 18 percent and 6 percent, respectively, compared to the first half of 2011. June was the slowest month of the year for beef exports to Mexico, reflecting a very unfavorable exchange rate.

In fact, the peso weakened to more than 14 pesos per dollar in late May and early June, its lowest level since the economic crisis of 2008-2009. In recent weeks the peso has fared only slightly better, trading mostly in the range of 13 to 13.5 per dollar.

A sluggish economy and an oversupply of domestic beef have also slowed beef exports to Korea – not only for the United States but all major beef suppliers. U.S. exports to Korea fell 24 percent in volume (65,963 metric tons) in the first half of the year and 19 percent in value ($309.2 million). Although there was no major interruption in trade, June results in Korea also reflected some impact from the April 24 BSE case.

In several other major markets, U.S. beef achieved an increase in export value despite moderately lower volumes. These included Japan, where exports were down 6 percent in volume (72,443 metric tons) but 14 percent higher in value ($476 million). For the second consecutive month, exports to Japan topped the $100 million mark ($105.3 million), dipping only slightly from the 2012 high reached in May.

Exports to leading value market Canada were down 7 percent in volume (80,859 metric tons) in the first half but increased 12 percent in value ($519.9 million); the Middle East was down 8 percent in volume (74,030 metric tons) but 11 percent higher in value ($170 million); the ASEAN region was down 8 percent in volume (31,826 metric tons) but 16 percent higher in value ($134.6 million); and Hong Kong was down 10 percent in volume (24,073 metric tons) but 16 percent higher in value ($135.9 million).

Russia and Central and South America were destinations in which U.S. beef achieved significant growth in both volume and value in the first half of the year – especially impressive since both had set new records in 2011.

Exports to Russia were up 17 percent in volume (38,210 metric tons) and 57 percent in value ($162.2 million), reflecting Russia’s growing appetite for higher-quality U.S. muscle cuts and the expanded TRQ for U.S. beef. Exceptional growth in Chile and a steady climb in exports to Peru and Guatemala pushed results in Central and South America 34 percent higher in volume (17,187 metric tons) and 82 percent higher in value ($64 million).

“While we are pleased to see beef export value on a record pace again this year, USMEF is focused on reversing this decline in volume,” said USMEF President and CEO Philip Seng. “The economic challenges are significant, and there is no single approach that applies in every market. But we are working with our contacts in the trade to educate customers about more economical beef cuts, which can help them maintain or expand their purchases of U.S. beef. We also take great care to emphasize the unique attributes of U.S. beef in an effort to build customer loyalty even in times of rising costs.”