WASHINGTON – Interruptions at US meat processing plants prompted by coronavirus outbreaks among plant workers weighed on red meat exports, especially beef, in May, the US Meat Export Federation (USMEF) said in its monthly export report.
May beef exports dropped 33% from a year ago to 79,280 tonnes, with value falling 34% to $480.1 million, as shipments were higher than a year ago to Hong Kong and China but trended lower to most other markets, USMEF said. For January through May, beef exports slipped 3% below last year’s pace in volume (512,596 tonnes) and 5% lower in value ($3.14 billion).
For the month, exports accounted for 12.5% of total beef production and 10.5% for muscle cuts only, down from 14.6% and 12.0%, respectively, in May 2019, USMEF said.
“As protective measures related to COVID-19 were being implemented, plant disruptions peaked in early May with a corresponding temporary slowdown in exports,” said Dan Halstrom, USMEF president and chief executive officer. “Unfortunately, the impact was quite severe, especially on the beef side. Exports also faced some significant economic headwinds, especially in our Western Hemisphere markets, as stay-at-home orders were implemented in key destinations and several trading partners dealt with slumping currencies.”
A bright spot for the sector was the US-China Phase One Economic and Trade Agreement, in which China agreed to purchase $36.5 billion in US agricultural products in 2020. The red meat provisions of the agreement went into force in late March providing much-needed momentum to exports of US beef, USMEF said.
January-May red meat exports totaled 4,926 tonnes (up 66% from a year ago) valued at $38.9 million (up 71%). During the same period exports still accounted for slightly higher percentage of both total US beef production (14.1%, up from 14%) and muscle cut production (11.6%, up from 11.3%) compared to 2019.
“Phase One provided significant market access gains for US beef, finally putting the US industry in position to compete in the world’s fastest growing beef market,” Halstrom said. “These early results are really just a small preview of what we expect to see as China’s foodservice sector regains momentum and US beef production returns to its normal level.”
Despite lower results in May, US beef is coming off a record year in Taiwan. Exports to Taiwan remained 2% ahead of the 2019 pace at 24,889 tonnes, with value slightly lower at $215.8 million (down 1%).
And exports of US beef to Canada remained substantially ahead of last year’s pace at 46,762 tonnes, up 15% from a year ago, while value increased 16% to $307.3 million. USMEF said especially strong demand for beef variety meat drove results, with exports jumping 33% to 4,332 tonnes, valued at $8.6 million (up 44%).
Export gains were not enough to offset declines in beef exports to other markets, however.
May exports to leading market Japan dipped 33% from a year ago in volume (19,986 tonnes) and 36% in value ($121.9 million). Exports to South Korea were also hit hard in May at 18,319 tonnes, down 20% from a year ago, with value dropping 27% to $120.4 million.
Export volume to Mexico plunged 65% to just 6,989 tonnes, valued at $25.5 million (down 72%). USMEF said headwinds included lower US beef production, COVID-19 related restrictions and a slumping peso.
In the pork sector, African swine fever continues to drive demand for pork in China, and US processors are working to meet the demand. US pork exports remained higher than a year ago but were the lowest since October of 2019, USMEF said.
May pork exports totaled 243,823 tonnes, 12% above a year ago but down 13% from the monthly average for the first quarter of 2020. Export value was $620.9 million, up 9% year-over-year but 16% below the first quarter monthly average.
USMEF said China and Hong Kong continued to drive pork export growth in May. Exports for the month eased from recent record highs but still reached 112,820 tonnes, up 148% from a year ago, valued at $259 million (up 188%). Through May, exports to China and Hong Kong tripled the pace set in 2019 at 526,273 tonnes (up 203%), valued at $1.25 billion (up $284%).
Exports accounted for 36.2% of total pork production in May and one-third of muscle cut production, up substantially from last May’s ratios (27.3% and 23.3%, respectively). For January through May, exports accounted for 33% of total pork production and 30% for muscle cuts, also up significantly from last year (25.4% and 22.1%, respectively).
Pork exports to Japan trended lower in May but January-May shipments remained 7% ahead of last year’s pace at 169,912 tonnes, valued at $704 million (up 10%), according to USMEF.
Japan’s import data (also through May) showed a 4% increase in US chilled pork at 88,217 tonnes. Chilled pork accounts for more than half of US exports to Japan, USMEF noted, much of which is high-value product destined for retail.
Japan’s imports of US ground seasoned pork increased 43% to nearly 50,000 tonnes, while value soared 69% to $150 million. Reduced tariffs helped drive results, Halstrom said.
“Having US pork back on a level tariff playing field in Japan has been especially important in these challenging times,” Halstrom said. “Without the US-Japan Trade Agreement, which took effect Jan. 1, US pork would still be at significant disadvantage compared to European and Canadian pork — something we absolutely could not afford in what has traditionally been our leading value market.”
Demand for US pork in Chile has soared in 2020, with exports climbing 26% from a year ago to 21,643 tonnes, valued at $605 million (up 30%).
In Vietnam, demand for US pork has increased dramatically, USMEF said, as the country continues to battle ASF. US pork exports increased 129% to 7,050 tonnes, valued at $15.5 million (up 141%). On July 10, Vietnam will reduce its most-favored-nation tariff rate on frozen pork muscle cuts from 15% to 10%, which will further boost the competitiveness of US pork, USMEF noted.
In May, volume of US pork exports to Mexico was still down 28% compared to a year ago to 37,715 tonnes, with value dropping 25% to $111.5 million. This pushed January-May exports 35% below last year’s pace at 275,823 tonnes, though value was still up 4% to $472.4 million, USMEF said.
Domestic pork production in Mexico has been increasing and domestic pork prices moved lower this spring, USMEF said, driving increased price-driven competition in the market.
“With this in mind, July 1 implementation of the US-Mexico-Canada Agreement is especially important for reassuring customers in Mexico and Canada that duty-free trade guided by science-based regulations will continue,” USMEF said in its report.
For May, exports of US lamb declined 14% to 1,127 tonnes compared to a year ago, while value fell 46% to $2.33 million. For January through May, exports were down 19% in volume (5,463 tonnes) and 28% in value ($8.21 million).