Last week, the USDA’s Economic Research Service (USDA-ERS) published the U.S. monthly meat and poultry trade data for April. Those data are on a carcass weight equivalent basis. Both beef and pork export tonnage exceeded expectations, while chicken remained lackluster. At 254 million pounds, U.S. beef exports during April were 16 percent above 2017’s and the largest ever for that month. U.S. beef imports declined year over year by 6 percent.

USDA-ERS reported that the U.S. sold beef directly to 93 different countries during the month of April. In order of size, the top six destinations were Japan, South Korea, Mexico, Canada, Hong Kong and Taiwan. Year over year, large percentage gains occurred to Mexico (rising 31 percent), Taiwan (up 19 percent), Canada (increasing 11 percent) and Japan (up 9 percent).

Surging U.S. pork exports helped mitigate the amount of competition beef faced at the domestic meat case from pork. April’s tonnage was 548 million pounds (carcass weight basis), which was the largest monthly number ever. Tonnage sold to Mexico, the largest market for U.S. pork, was record-large in April (182 million pounds) and increased a dramatic 41 percent from a year ago.

In the U.S. wholesale meat marketplace, robust exports have been a factor cushioning beef prices against large supplies. Will that situation continue? In the World Agricultural Supply and Demand Estimates (WASDE) issued last month by the USDA, its forecast was for U.S. beef exports in 2018 to be 3.03 billion pounds, 6 percent above 2017’s. That would be the first time for foreign sales to exceed 3 billion pounds. Year-to-date trends are on the path to reach that level.

WASDE forecasts can only incorporate “current known” U.S. policy and that of foreign governments. Of course, in the last 30 days, the unknowns regarding trade policy and hence implication on U.S. meat exports have greatly increased. While the new WASDE was released on Tuesday (June 12), clear-cut assessments of the trade environment may be several months down the road.

More than just insights into actual policy changes and tariff rates are required to forecast exports. For example, in the current world economic environment, exchange rates adjustments can have a significant impact on the price paid by a foreign buyer for U.S. agricultural products. Exchange rates are determined by macroeconomic forces and by sectors much bigger than the agriculture and food trade sphere. That is, exchange rates are realistically exogenous, using an economics term, to the trade of agricultural and food products. The value of the Mexican peso could drop versus the U.S. dollar, mitigating, at least partially, the short-term impacts of any new tariffs on U.S. exports to that country.  

James G. Robb is the director of the Livestock Marketing Information Center. This originally appeared in the June 11, 2018, Oklahoma State University Cow/Calf Corner newsletter.