“Market access issues and the sustained strength of the U.S. dollar continue to make 2015 a very tough year for red meat exports,” says Philip M. Seng, U.S. Meat Export Federation (USMEF) president and CEO. “On the beef side, exports are also constrained by lower production, but the herd rebuilding that is currently limiting our beef supplies is overdue, and will pay dividends in 2016 and beyond.”
Beef exports in July were 10% less than the same time a year ago, the least since 2010, according to USMEF. The value of beef exports was 11% less year-to-year at $555.7 million. For January through July, export volume is 10% less year-over-year and value is 2% less. Even so, beef export value averaged $289.41 per head of fed slaughter, up 4% year-over-year.
“U.S. exports were already facing a very challenging situation with regard to exchange rates, and that situation worsened over the past three weeks,” Seng says.
Seng explains China’s mid-August devaluation of the yuan sent currencies of several key importing countries and large competitors lower versus the U.S. dollar. For example, the Korean won, the Taiwanese dollar and the Mexican peso all weakened significantly. At the same time, the Australian and New Zealand dollars—key export competitors to the U.S.—are trading at the lowest levels since 2009 and the Brazilian real is at its weakest point in more than a decade.
“This means we must work even harder to differentiate U.S. meat based on attributes other than price by educating international buyers on the quality and value our products deliver,” according to Seng. “This has always been a strong focus for USMEF, but it’s more important than ever that we establish and maintain customer loyalty in our key markets.”
Pork exports also continue to head south, especially when it comes to value. July pork exports were 23% less than the same time a year earlier at $443 million, the least in more than four years. In terms of volume, pork exports were 4% less. For January through July, pork exports are down 17% year-over year for value and are 5% less year-over-year for volume.
According to USMEF, pressures on pork exports include the ongoing closure of the Russian market to the nation’s three largest suppliers, which has spawned an influx of Canadian and European pork exports to Asia, Oceania and Latin America. Increased production in major exporting countries is also applying price pressure.
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