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Red meat exports start year below 2020 levels

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Exports still facing COVID-related obstacles, significant transportation and labor challenges.

U.S. beef and pork exports opened 2021 below the large volumes posted a year ago, according to January data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).

Beef exports totaled 105,047 metric tons (mt) in January, down 2% from a year ago, while value slipped 3% to $653 million. The decline was due mainly to lower beef variety meat shipments, as muscle cut exports were steady with January 2020 at 81,398 mt, valued at $584.4 million (down 1%) and accounted for a larger share of production than a year ago. January beef exports were very strong to South Korea and continued to gain momentum in China. Following a down year in 2020, exports also rebounded to the Middle East.

January pork exports totaled 248,656 mt, down 9% from a year ago but were still slightly above USMEF's projections. Export value was down 13% to $642.8 million. Pork muscle cut exports were down 11% in volume (208,234 mt) and 15% in value ($551.3 million), while pork variety meat shipments trended modestly higher than a year ago. While pork exports to China/Hong Kong declined as expected, exports to Japan increased in January and demand was very strong in Central America, the Philippines and the Caribbean.

USMEF President and CEO Dan Halstrom said January represented a fairly solid start to 2021, but cautioned that exports still face COVID-related obstacles and significant transportation and labor challenges.

"As key destinations for U.S. red meat roll out COVID vaccination programs, the outlook for 2021 is optimistic, with retail meat demand remaining strong and the expectation that foodservice will rebound in more and more regions," Halstrom said. "But transportation challenges are currently a dominant concern, particularly the congestion and container shortages at our West Coast ports where shorthanded crews are handling record-large cargo volumes. Labor is also at a premium in processing plants, which affects the industry's ability to fully capitalize on demand for certain labor-intensive cuts and variety meat items.

He added, "Although the global foodservice sector still has a long recovery ahead, international demand for U.S. red meat remains impressive and resilient. But a range of logistical challenges must be overcome in order to fully satisfy this demand."

Korea shines for U.S. beef; momentum continues in China

January beef exports equated to $311.78 per head of fed slaughter, up 3% from a year ago. Exports accounted for 13.3% of total beef production and 11% for muscle cuts only, above the January 2020 ratios of 13.1% and 10.6%, respectively.

Beef exports to South Korea opened 2021 on a very strong note, climbing 20% from a year ago in volume (21,355 mt) and 22% in value ($158.7 million). On Jan. 1, U.S. beef received another tariff reduction under the Korea-U.S. Free Trade Agreement. The rate is now 13.3% – about one third of the pre-FTA rate of 40% – and will decline to zero by 2026. The U.S. has a tariff advantage compared to Australia (18.6%) and Canada (21.3%) in 2021, and tariffs do not phase to zero for Australia and Canada until 2028 and 2029, respectively, under their free trade agreements with Korea.

January was another big month for U.S. beef exports to China, which were up nearly 800% from a year ago in both volume (7,862 mt) and value ($58.1 million). In September, the U.S. overtook Australia as China’s largest grain-fed beef supplier. In January Australia’s grain-fed exports to China were 3,345 mt, down 49% from 2020.

Japan remained the leading volume market for U.S. beef at 22,018 mt, down 13% from a year ago, but slipped to second place in value (behind Korea) at $138.1 million (also down 13%).

Pork exports led by growth in Japan, Central America, Philippines and Caribbean

According to USMEF, January pork exports equated to $57.14 per head slaughtered, down 9% from a year ago. Exports accounted for 28.2% of total pork production and 25.4% for muscle cuts only, down from 29.8% and 27.4%, respectively, in January 2020.

As expected, pork exports to China/Hong Kong were well below last year’s very large volumes but still reached 76,202 mt (down 21% from a year ago) valued at $173.3 million (down 29%). While USMEF expects exports to the region to remain below 2020 levels throughout the year, China still has a pressing need for imported pork. January exports included a mix of frozen cuts, bone-in hams and boxed carcasses. Carcass export volume was 5,923 mt, the largest since June.

Despite the continued 25% retaliatory duty on U.S. pork and pork variety meats, China’s demand for pork variety meat remains strong, with January exports of pork variety meat to China/Hong Kong increasing 18% from a year ago to 24,475 mt.

Pork exports to Japan opened 2021 on a positive note, increasing 2% from a year ago in both volume (32,332 mt) and value ($134.6 million). Demand for chilled U.S. pork remains very strong in Japan’s retail sector and the U.S. industry has reclaimed market share for ground seasoned pork since the U.S.-Japan Trade Agreement (implemented in January 2020) slashed the duty rate and eliminated a severe tariff disadvantage. Japan’s duty rate on ground seasoned pork will notch down again on April 1 to 6.6%, compared to the pre-trade agreement rate of 20%.

Coming off a record year in 2020, USMEF reported that pork exports to Central America continued to shine in January at 11,023 mt, up 56% from a year ago, valued at $26.9 million (up 43%). January export volume was the fourth largest on record and significantly above the usual seasonal trend, as exports more than doubled to Panama and posted impressive growth in Honduras, Guatemala, Nicaragua and Costa Rica.

A detailed summary of the January export results, including market-specific highlights, is available from the USMEF website.

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