Fri, 08 Jun 2018
US - April red meat exports were excellent. The early Easter may have helped, adding more work days to the month compared to a holiday shortened month last year, according to Steiner Consulting Group, DLR Division, Inc.
Lower hog and cattle prices also provided an assist, sometimes offering foreign buyers an opportunity to cover needs at lower prices. Below are some of the highlights with April export data on a product weight basis. We will use the carcass weight data to calculate per capita domestic availability in April as well as an early look at May product flows.
Total exports of fresh/frozen beef and veal on a product weight basis were 83,351 MT, 15.2 per cent higher than a year ago. Exports were higher despite a slowdown in shipments to Hong Kong, which was a key market for US beef in 2017. Japan was the top market for US beef in April, both in terms of volume and value.
Shipments to Japan for the month were 21,416 MT, 10 per cent higher than a year ago. The value of those exports for the month was $141.4 million, 23 per cent higher than last year. It is easy to surmise strong demand when you ship 10 per cent more product and get paid 23 per cent more for it than the previous year.
South Korea has always been a key market but shipments there have accelerated in recent months. In part this reflects strong economic growth (better demand) but increasing competition from China for Oceania supplies. US shipments to South Korea in April were 17,789 MT, 63 per cent higher than a year ago.
The value of exports to South Korea was $127.6 million, 74 per cent higher than last year. Beef exports to NAFTA countries have been increasing as well. Shipments to Mexico were 12,671 MT in April, 30 per cent higher than a year ago, with a total value of $73.3 million, 35 per cent higher than a year ago.
Net beef trade between US and Mexico is about flat on a volume basis but on a dollar basis US has a positive trade balance with Mexico. US beef imports from Mexico in April were 12,427 MT with a total value of $72.6 million. April imports from Mexico were down 20 per cent compared to a year ago in terms of volume but dollar imports were about unchanged.
Pork exports were higher quite a bit higher than we expected based on the weekly shipment data. Total exports of fresh/frozen pork in April were 184,489 MT, 18.4 per cent higher than a year ago. The chart below illustrates where the growth in export volume came from in April.
Mexico accounted for a big chunk of the growth, hence current market trepidation about Mexico tariffs. Total shipments to Mexico in April were 66,685 MT, 42.6 per cent higher than a year ago. Shipments to Mexico in April accounted for 36 per cent of all US pork exports and near 70 per cent of the increase in shipments was due to Mexico demand.
Japan was the second largest market for US pork in April, with shipments totaling 30,073 MT, 5.5 per cent less than last year. As with beef, US pork exports to South Korea have taken off. Total shipments to this market in April were 23,973 MT, 69.9 per cent higher than last year. The value of US pork exports was also higher but one can see that part of the reason why exports posted such robust growth was due to lower prices available.
In the case of Mexico, the value of exports was $114.7 million, 32 per cent higher than last year. Japan remains the most valuable market for US pork even as shipments to Japan are less than half of exports to Mexico. The value of exports to Japan in April was $122.4 million, 4 per cent less than a year ago.
Bottom line: Global meat protein demand remains in excellent shape. US producers have more meat to sell than they did a year ago. It is a recipe for growth that has played out so far this year. The question is whether this will continue amidst threats of trade wars, tariffs and barriers to commerce.