Market access slows US pork and beef exports

06-Jun-2013 - Last updated on 07-Jun-2013 at 08:43 GMT

Related tags Beef exports International trade Beef Pork

US pork and beef export volumes saw some recovery in April, but are still lagging behind last year’s levels, according to data from the US Department of Agriculture.

The US exported 86,433 metric tonnes (mt) of beef last month, a 9% fall on 2012 levels, while export value was down 7% to $434.8 million. However, export values were 2% higher in the first four months of this year, despite volumes down 5% year-on-year to 343,020mt.

Pork exports for April were down 5% in volume, at 174,073mt, and 7% in value, at $475.1m. Volumes for January to April were down 10% year-on-year in both volume and value, at 702,268mt worth $1.96 billion.

The US Meat Export Federation (USMEF), which collated the figures, put the “sluggish” export performance down to “market access issues and oversupply of domestic product in key markets”.

The biggest losses have occurred in Russia, which banned US beef and pork in February following a dispute over ractopamine. It is estimated that the trade impasse has cost the US industry around $97m in beef exports and $58m in pork exports so far this year.

“Along with our lack of access to sell beef in mainland China, this is the biggest barrier we face in terms of market access,” said USMEF president and CEO Philip Seng.

“One often overlooked factor is the effect this suspension has on the price US products command in markets other than Russia. For example, beef livers to Egypt have increased in volume, but the value is down. There is also downward pressure on the prices offered for rounds, hams and pork for further processing. The impact is much broader than many analysts realise at first glance.”

Beef

US beef exports were also hampered by “slow demand” in Mexico and South Korea. USMEF put the poor Mexican performance down to the relative cost of beef compared to other proteins and said South Korean imports had been hit by oversupply of domestic beef. Further losses were experienced in the ASEAN region, driven by weak demand in Vietnam and trade restrictions in Indonesia.

However, exports to Japan rose sharply with the market becoming the biggest destination for US beef since 2003. Exports to Japan were up 49% in volume and 44% in value for the first months of the year compared to the same period last year, boosted by the country’s decision to raise the age limit on US beef from 21 months to 31 months.

“Many observers felt USMEF’s growth projections for Japan were overly bullish,” Seng said. “But we were keenly aware of the unmet demand from existing buyers and the opportunities to secure new business once we had a wider supply available. This shows once again the importance of having experienced staff on the ground who know how to direct marketing resources in a way that will maximise results.”

However, Seng warned that Japan had a safeguard in place which would increase tariffs if volumes rose too quickly.

Beef exports to Taiwan, Hong Kong and Canada also saw good growth in the first four months of 2013.

Pork

Pork exports saw some losses in the Japanese market with exports down 12% in volume and 9% in value in April. However, USMEF pointed out that this was from a very strong performance in 2012 and the country has reduced imports from all trading partners so far this year.

Exports to China, Hong Kong and Korea also fell in volume and value in the first four months of 2013, although USMEF said this was “mostly a reflection of low domestic prices, which have begun to stabilise in recent weeks”.

Growth in pork exports was driven by strong performance in the Central-South America region, with good year-on-year growth in Columbia, Chile and the Dominican Republic for the January-April period. Exports to Mexico were down so far this year, but saw strong recovery and double-digit growth in April. Exports to Canada continued to improve from last year’s record.

“It is gratifying to see US pork performing so well in our neighboring markets and the April recovery in Mexico was especially critical,” Seng said. “The strong results in Mexico and Canada really underscore the importance of resolving our issues with country-of-origin labelling so that our exports don’t face retaliatory measures from these trading partners.”

Pork exports to the ASEAN region also performed well, boosted by strong results in the Philippines and Taiwan.