Port backlog drags on January meat exports

by Erica Shaffer
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Exports of beef, pork and lamb posted sharp declines in January. USMEF reports challenges came from congestion at West Coast ports and economic factors.

WASHINGTON – Exports of US meat products faced strong headwinds in January, including a recent labor dispute at West Coast ports and a number of economic factors, the US Meat Export Federation (USMEF) reported.

January meat exports posted sharp declines for the month. Export volumes for beef and pork were at four-year lows, January beef exports dropped 18 percent to 79,899 metric tons (mt), while export value declined 2 percent to $503.57 million. Pork exports for the month tumbled 16 percent to 161,165 mt, while the value of pork exports fell 15 percent to $455.3 million for the month.

“We expected January to be a difficult month, so these results are not especially surprising,” said Philip Seng, USMEF president and CEO, “but I see the January slowdown as a wakeup call for the US industry in terms of the fiercely competitive situation we face in key markets. Conditions are now improving in the West Coast ports, but the damage caused by that impasse is still not finished, and it is clear that competitors capitalized on our inability to move product in a timely fashion. We need to win back the confidence of the valuable Asian customer base we spent many years building.”

Seng noted that global beef supplies are extremely tight, while pork supplies are on the rise and competition in major export markets for pork continues to intensify. He added that while congestion at West Coast ports played a role in the decline of US meat exports for January, other economic factors came into play.

“The currencies of several of our major destinations have weakened substantially against the US dollar – not only in Asia, but also in the Western Hemisphere,” he said. “And unfortunately the currencies of our major competitors – Australia, the European Union, Brazil and Canada, to name a few – are also in a weakened state. We saw this building throughout the latter half of 2014, and the price disadvantage is increasingly difficult to overcome.”

Shipments of chilled beef pork to Japan suffered the brunt of the port crisis, according to USMEF. Buyers in Japan were reluctant to place orders for chilled meat because congestion at West Coast ports raised concerns about the shelf life of beef products. Meanwhile, shipment volume dropped of chilled pork dropped 22 percent to 14,465 mt. Excluding variety meat, total pork exports to Japan had already fallen below 30,000 mt per month in four out of the past five months as Europe continued to gain market share, USMEF reported.

“In Japan and several other Asian destinations, a huge influx of low-priced European pork has poured onto the market since the EU pork industry lost access to Russia,” Seng said. “Combine this with the West Coast port impasse and the euro at an 11-year low versus the US dollar, and January was something of a perfect storm for US pork. EU pork is not likely to re-enter Russia anytime soon, so competition from European suppliers will remain intense — especially in our key Asian markets. It is therefore imperative that the US industry meets this challenge in order for our exports to rebound from this rough beginning to the year.”

But the news wasn't all bad for January meat exports. Bright spots for US Beef exports included Mexico, Taiwan and the Caribbean.

Exports to Mexico, the leading export market, were not impacted by the port congestion, according to USMEF. Variety meats offset declines in smaller muscle cut volumes. Total export volume Mexico was flat at 20,213 mt, but value increased 12 percent to $105.1 million.

Exports to the Dominican Republic tripled in volume to 463 mt and increased 130 percent in value to $3.2 million, USMEF reported. Results for the whole Caribbean region were up 13 percent in volume (1,764 mt) and 23 percent in value ($12.1 million).

Taiwan was the only major Asian destination to hold up well through the port crisis. Export volume to Taiwan advanced slightly to 2,134 mt while value increased 37 percent to $23.4 million.

Pork exports to Korea were higher, while export value of shipments to Mexico remained steady, according to USMEF. Exports to Mexico slipped 1 percent compared to a year ago to 59,306 mt, while value was steady at $112.8 million. Exports to Korea jumped in both volume (15,262 mt, 34 percent) and value ($51.4 million, 54 percent).

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