Tag Archives: exports

U.S. Meat Export Federation (USMEF) members gathered in Kansas City Wednesday for Day 1 of the USMEF Spring Conference and Board of Directors Meeting, with recent trade developments lending an optimistic tone to the event. In his address to the USMEF membership, President and CEO Dan Halstrom reported on Mexico’s removal of retaliatory duties on U.S. pork, Canada’s elimination of a 10% duty on prepared beef products and Japan’s lifting of longstanding restrictions on U.S. beef exports.

“When I was preparing my comments a week ago there were a lot of negative things to talk about, like the 20% duty on pork going into Mexico,” Halstrom explained. “But we received some great news with the U.S., Mexico and Canada reaching a resolution on steel and aluminum tariffs and removal of the retaliatory duties on U.S. products. So on Monday morning, the first loads of pork in nearly a year crossed the border into Mexico at zero duty.”

Halstrom said he is also encouraged by the recent launch of U.S.-Japan trade negotiations, noting that Japan’s new trade agreements with the European Union and countries participating in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) have put U.S. pork and beef at a significant disadvantage in the leading value market for both products. He added that gaining access to Japan for U.S. beef from cattle of all ages, which was announced last week and took effect May 20, will provide immediate, added momentum for U.S. beef exports.

“Now that the 30-month cattle age limit has been lifted, we estimate that this will provide a $150 to $200 million per year incremental boost for beef exports to Japan,” Halstrom said. “This opens up new product lines such as mountain chain tripe and tongues on the variety meat side, and for primal cuts we’ll see demand for middle meats and chuck rolls. It’s very exciting news and I want to extend a great big thank you to USDA and USTR for their work on this issue.”

USMEF Chair Conley Nelson, a pork producer from Algona, Iowa, said resiliency and industry unity are key factors in gaining broader market access for U.S. agricultural exports.

“Obviously we are in a period of uncertainty and volatility, and that can sometimes lead to increased tension and division in U.S. agriculture,” Nelson explained. “That’s something we absolutely cannot afford, especially in these difficult times. So I’m excited to see such a high level of cooperation among all industry sectors.”

Wednesday’s keynote speaker was Peter Zeihan, a global trade expert and best-selling author who offered his perspective on how the current trade environment impacts U.S. agriculture and the red meat industry specifically. He noted that despite facing many challenges, the United States is remarkably well-positioned to have continued success as an agricultural exporter.

“Geographically, the U.S. has it made,” Zeihan explained. “The Greater Midwest is the single largest chunk of arable land in a temperate zone in the world, and it out-produces the next two largest agricultural zones put together. The Greater Mississippi, by itself, has more miles of naturally navigable waterway than the combined internal systems of the rest of the world. This chunk of North America is both the richest territory on the planet and the most securable. Decades of bipartisan effort have yet to screw this up, and this will not be the administration that cracks the code.”

When asked about the United States’ trade deficit, Zeihan acknowledged that the deficit has expanded under the Trump administration and that the administration’s approach to trade has been hard on U.S. agriculture. However, Zeihan feels strongly the U.S. has the upper hand in trade relations, especially with China.

“The United States holds all the cards here, and if the U.S. is willing to walk away from the game board and kick it over, it won’t be the one feeling the pain,” he said. “What you’re seeing right now with the trade deficit is a transitional period. In this moment, it looks like the United States doesn’t have as much leverage as it actually does. You feel that more than any other sector, because agriculture is the only thing that foreign governments can target. But this moment of transition isn’t going to last long. The title of my presentation was ‘At the Edge of Disorder,’ and we’re at the edge.”

The USMEF Spring Conference continues Thursday with an address (via teleconference) from Ted McKinney, USDA under secretary for trade and foreign agricultural affairs, and meetings of USMEF’s standing committees. The conference will conclude Friday with a panel discussion on the trade implications of African swine fever.

South Korea continues to be the growth leader for U.S. beef exports, with first quarter volume climbing 8% year-over-year to 56,173 mt, while value ($414.2 million) was 13% above last year’s record-shattering pace. U.S. beef has achieved remarkable success in Korea’s traditional retail and restaurant sectors but is also rapidly gaining popularity in outlets such as convenience stores and e-commerce platforms. Recent export growth is not only in the ever-popular short rib category, but also in short plate, briskets, clods and rounds, as end-users recognize the versatility and affordability of high-quality U.S. beef.

Beef exports to Japan were moderately lower than a year ago in March, but still finished the first quarter 2% above last year’s pace in volume (74,147 mt) and 5% higher in value ($480.4 million). This was fueled by growth in variety meat exports, with the U.S. shipping more tongues and skirt meat to Japan. U.S. beef faces a widening tariff disadvantage in Japan compared to imports from Australia, Canada, New Zealand and Mexico, and the latest tariff reduction for these countries didn’t take effect until April 1.

“U.S. beef cuts are still subject to a 38.5% tariff in Japan while our competitors’ rate is nearly one-third lower at 26.6%,” explained Dan Halstrom, USMEF president and CEO. “This really underscores the urgency of the U.S.-Japan trade negotiations, which must progress quickly if we are going to continue to have success in the leading value market for U.S. beef and pork.”

Japan’s tariffs on beef variety meat are lower, but U.S. shipments are subject to a duty of 12.8% while competitors pay less than half that rate.

Other first quarter highlights for U.S. beef include:

  • Beef muscle cut exports to Mexico continued to shine, with first quarter volume up 14% from a year ago to 35,481 mt and value climbing 16% to $220.7 million. While variety meat exports trended lower year-over-year, combined beef/beef variety volume still increased 1% to 57,591 mt while value jumped 12% to $280.2 million.
  • Exports to Taiwan were 3% above last year’s record pace at 13,487 mt, though value slipped 7% to $117.8 million. U.S. beef dominates Taiwan’s chilled beef market with nearly 75% market share – the highest of any Asian destination.
  • CAFTA-DR markets continue to be an excellent source of growth for U.S. beef exports, with first quarter volume to Central America up 15% from a year ago to 3,628 mt and value up 19% to $21.2 million. Exports to the Dominican Republic soared 71% to 2,345 mt valued at $18.9 million (up 65%).
  • Lower exports to Hong Kong and Canada offset some of the first quarter growth in other markets. Exports to Hong Kong trailed last year’s pace by 36% in volume (21,304 mt) and 30% in value ($177.1 million). Exports to Canada were down 14% in both volume (23,199 mt) and value ($143.8 million).
  • U.S. exports to China were up 4% from a year ago to 1,723 mt, but this came at lower prices as export value fell 17% to $13.2 million. There is tremendous potential in the Chinese market for U.S. beef, but due to China’s restrictive import requirements and retaliatory duties pushing the tariff rate to 37%, U.S. prices are significantly higher than the competition. By comparison, most beef suppliers are subject to a 12% tariff in China while beef from New Zealand is duty-free and Australian beef pays only a 6% rate. Australia’s grain-fed beef exports to China in the first quarter totaled 14,347 mt, up 77% year-over-year.

For the first quarter of 2019, U.S. beef exports were slightly below last year’s record pace while pork exports continued to be slowed by trade barriers, according to March data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). U.S. lamb exports were a first quarter bright spot, trending significantly higher than a year ago.

March beef exports totaled 107,655 metric tons (mt), down 4% year-over-year, while value fell 2% to $678 million. For the first quarter, exports were down 3% at 307,306 mt valued at $1.9 billion (down 0.8%).

March beef exports were very strong on a per-head basis, with export value per head of fed slaughter averaging $335.81 – up 1% from a year ago and the highest since December. The first quarter average was $309.32/head, down 2% from a year ago. March exports accounted for 13.6% of total U.S. beef production and 11% for muscle cuts only, which was fairly steady with last March. For the first quarter these ratios were 12.9% and 10.2%, down from 13.2% and 10.7%, respectively, a year ago.

Pork exports totaled 211,688 mt in March, down 7% from a year ago, valued at $520.7 million (down 15%). First quarter exports were 6% below last year’s pace in volume (600,268 mt) and down 14% in value ($1.47 billion).

Pork export value averaged $48.55 per head slaughtered in March, down 15% from a year ago. For January through March, export value averaged $46.15 per head, down 16% from the first quarter of 2018. March exports accounted for 25.6% of total U.S. pork production and 22.7% for muscle cuts only – down from 27.5% and 23.5%, respectively in March 2018. First quarter exports accounted for 24.4% of total pork production (down from 26.6%) and 21.3% for muscle cuts (down from 23%).