DENVER — Awaiting final beef and pork exports results for June, which will be released this week, Erin Daley, U.S. Meat Export Federation Economist, is expecting pork plus pork variety-meat exports to remain below last year’s record pace. However, the totals should still be well ahead of 2007 export levels. The shift is primarily due to the significant decline in exports to China and Russia, which has been offset to some degree by an increase in the volume of pork variety meat to other global markets.
Pork exports during May and early June were also negatively impacted by trade suspensions related to H1N1 influenza.
"Through May, (pork) exports were down just 4% and it’s looking like this will hold fairly steady through June," Ms. Daley said. "The major increases in pork exports this year have been to China, Hong Kong and Russia. Of course, H1N1 has had (a negative) impact on exports to China as we still face bans on all pork exports to that market. But the important thing to remember is exports to China were down before the H1N1 issue because prices in China are 45% to 50% lower than last year due their increase in domestic production."
Mexico, on the other hand, looks like exports have held fairly steady there, Ms. Daley continued, which reflects "an impressive comeback" after a decrease in demand due to the H1N1 issues in that market, she said.
Ms. Daley expects mid-year beef plus beef variety-meat exports to be roughly equal to the first half of 2008. She points out that while U.S. beef sales in Asia are well ahead of last year’s pace, this has been largely offset by a sharp decline in exports to Mexico — the No. 1 market for U.S. beef.
"Beef exports should be somewhat steady compared to last year due to an increase of business in Asia offsetting declines in other markets," she said. "(Beef exports to Asia) are up 46% compared to last year, part of that is due to access to Korea. If we excluded Korea, exports would still be up 16% due to an increase in exports to Japan and the greater China region."
This is offsetting the decrease in exports to the U.S.’s No. 1 beef market — Mexico, she added. Mexico’s volume still remains around 30% lower than last year mainly because beef cuts are about three times more expensive then pork hams and more expensive than poultry, Ms. Daley pointed out. "We have seen some trading down by Mexican consumers away from beef and into pork and poultry," she concluded.