U.S. beef exports through July were 17% higher year-over-year. Increased shipments to Asian markets, namely Japan and South Korea, in addition to higher trade levels to several relatively smaller markets such as Russia and Egypt, have been key drivers in the U.S. beef export market thus far in 2010.
Exports to South Korea and Japan through July increased 127% and 21%, respectively, year-over-year. In recent weeks the Japanese yen has risen sharply against the U.S. dollar and currently remains at its highest level since 1995. The weaker U.S. dollar makes U.S. products relatively cheaper and more attractively priced in Japan, particularly in light of the current strength of the Australian dollar, the primary U.S. competitor for beef markets in Asia.
In both the near and longer terms, the U.S. is expected to gain a greater share of the Japanese beef market. The U.S. currently holds a 16% share of the Japanese beef import market compared with Australia’s 73%. In South Korea, total world beef exports increased 21% through July, and the U.S. has captured substantially greater year-over-year gains in this market. The U.S. currently holds 30% of the South Korean beef import market, second to Australia’s 52%.
Continued demand from traditionally smaller markets has also boosted U.S. beef exports in 2010, with 4% and 3% of U.S. beef exports through July going to Russia and Egypt, respectively. Although periodically elevated, U.S. beef exports to these markets have been historically negligible.
Strong global demand for beef continues to support the domestic market and underpin U.S. wholesale beef prices. In 2011, 2.15 billion lbs. of beef are forecast to be exported, while demand for U.S. beef in Asian markets should continue strengthening. The 2011 beef export forecast remains a robust figure, considering tighter domestic supplies due to the smaller U.S. calf crop and total cattle inventory registered for this year and forecast for next.