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Steamy exports continue to underpin beef pricesSteamy exports continue to underpin beef prices

Beef export value in July averaged $326.18 per head of fed slaughter, up 9% from a year ago. Through July this year, per-head export value was up 16% to $318.31.

Wes Ishmael

September 8, 2018

3 Min Read
Steamy exports continue to underpin beef prices

“The strength in the cattle market is largely due to strong beef demand. If it were not for strong beef demand, prices of most classes of cattle would be moving lower and at a fairly quick clip,” explained Andrew P. Griffith, agricultural economist at the University of Tennessee, in recent market comments.
Domestically, the all-fresh Beef Demand Index in the second quarter was 0.4% more than the same quarter a year earlier.
Internationally, U.S. beef exports are nothing short of extraordinary.
For January through July, beef exports were record large for both volume (779,450 metric tons) and value ($4.76 billion), according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). That’s 10% more volume year over year and 20% more value.
 For July (the most recent data) U.S. beef exports climbed 12% in volume compared to the previous year at 116,575 metric tons (mt). Value for July was 16% more than the previous year at $722 million, just slightly below the May 2018 record of $722.1 million.
Beef export value in July averaged $326.18 per head of fed slaughter, up 9% from a year ago. Through July this year, per-head export value was up 16% to $318.31.
“The worldwide momentum for U.S. beef has rarely been as strong as it is today,” says Dan Halstrom, USMEF president and CEO. 
“To a large degree, our mainstay Asian markets are driving this growth, but emerging markets in Asia and in the Western Hemisphere are also displaying a tremendous appetite for U.S. beef and contributing significantly to the surge in export value. From high-end restaurants to convenience stores, U.S. beef is gaining new fans across the globe on a daily basis.”
Beef exports in July accounted for 14% of total beef production and 11.8% for muscle cuts only (the highest since December 2016). For January through July, exports accounted for 13.5% of total beef production and 11.1% for muscle cuts, up from 12.8% and 10.1%, respectively, last year.
U.S. beef exports to Japan were 15% more than a year earlier at 31,883 mt, reaching a post-BSE high for the month. Value was 12% more at $196.3 million. For January through July, exports to Japan were 7% more in volume at 191,237 mt and 12% more in value at $1.21 billion.
Beef export growth to Korea continued at a remarkable pace in July, with volume up 51% from a year ago to 23,614 mt and value soaring 66% to $169.2 million. That shattered the previous monthly value record of $154.8 million, set a month earlier. For January through July, exports to Korea jumped 38% to 136,897 mt, valued at $971.2 million (up 54%).
Despite recent trade tensions and uncertainty, July beef exports to Mexico were 2% more than last year in volume at 137,560 mt and 9% more for value $596.5 million. The late-August trade pact between the U.S. and Mexico should provide more support.
As for China, while progress in trade talks is anyone’s guess, African Swine Fever (AFS) discovered in China last month and apparently spreading, could tip that nation’s hand when it comes to pork imports.
Through the third week of August, Chinese authorities culled more than 24,000 pigs in four provinces, in efforts to control the spread of AFS, according to the UN's Food and Agriculture Organization. That organization warned that the rapid onset of the virus in China, and its detection in areas more than 1,000 kilometers apart, could mean AFS may spread to other Asian countries anytime.
There is no effective vaccine to protect swine from the disease. And, while the disease poses no direct threat to human health, outbreaks can be devastating with the most virulent forms lethal in 100% of infected animals.
China accounts for approximately half the global population of swine, estimated at 500 million. China is also the world’s largest pork importer.

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