March beef exports show positive momentum -

March beef exports totaled 86,774 metric tons (mt), down 7 percent from a year ago, but a 5 percent increase over February. Export value was $527.3 million, up 2 percent year-over-year but down slightly from February.

The March results reflect some degree of relief from the West Coast port congestion that plagued red meat exports in January and February. Port traffic began to improve after a tentative labor contract was reached in late February, though congestion lingered for several weeks at some major ports.

“Port congestion remained an issue well into March – and even into April in the Southern California ports – but the announcement of the new labor contract certainly improved the business climate,” says USMEF President and CEO Philip Seng.

“After months of frustration, the U.S. meat industry was finally able to reassure Asian buyers that the worst of the crisis was behind us and that they could once again count on the U.S. to fulfill its role as a reliable supplier. This was especially important for customers purchasing chilled pork and beef, which require very prompt delivery due to product shelf life.”

In addition to shipping concerns, U.S. exporters have found their competitive position in some key markets damaged by large volumes of lower-priced products from other supplying countries. In many cases, diminished purchasing power due to the strength of the U.S. dollar has made the price disadvantage even more severe.

Seng says, “In the beef complex, the projected slowdown in Australia’s production may still be coming, but certainly did not materialize in the first quarter.

“These are unusual conditions that are made more difficult by the strong U.S. dollar, but now isn’t the time to dwell on the stiff headwinds we are facing. We must aggressively defend the customer base the U.S. industry has worked so hard to build over the years by reaffirming the value and quality delivered by U.S. red meat.”

Japan, Mexico still mainstays for U.S. beef

March beef exports accounted for 10 percent of total production and 13 percent for muscle cuts only, slightly exceeding first-quarter ratios but down from 11 percent and 14 percent, respectively, from March 2014. Export value per head of fed slaughter was $284.30 in March, up 5 percent from a year ago. For the first quarter, per-head export value was $290.32, up 9 percent.

So far in 2015, beef exports to Japan have performed extremely well despite significant obstacles – including the West Coast port situation, a weakened Japanese yen and a tariff advantage for Australian beef under the recently implemented Japan-Australia Economic Partnership Agreement. First-quarter exports to Japan increased 4 percent in volume (48,347 mt) and 11 percent in value ($322.8 million).

Exports to Mexico increased 4 percent in value ($285 million) despite slipping 1 percent in volume (56,582 mt).

Beef exports to Korea got off to a very slow start in 2015, but continued to gain momentum in March. First-quarter volume was still down 4 percent from a year ago to 27,624 mt, but export value was up 2 percent to $204.1 million.

Exports to Taiwan trended in the opposite direction, slowing in March after a very solid start. First-quarter volume to Taiwan was down 10 percent to 6,382 mt, while value was up 11 percent to $64.1 million.

Exports to Hong Kong, which were record-large in 2014 but slowed toward the end of the year, were down 21 percent in volume (27,841 mt) and 6 percent in value ($211.9 million) in the first quarter.

Complete January to March export results are available on the USMEF statistics webpage.