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CME: Beef and Pork Exports at Record High

12 December 2011, at 1:29am

US - The impact of exports on pork and beef markets this year has been pretty well documented in these pages but the charts below show those impacts in a way that, we think, underscores the remarkable growth, write Steve Meyer and Len Steiner.

The charts show year-to-date exports in carcase weight equivalents through September, the last month for which data are currently available. (These carcase-weight data for October will be released on Monday, 12 December.)

The charts have been constructed so total exports for 2010 and 2011 are represented by the columns and read from the right-hand axis where individual markets for 2011 are represented by lines and read from the left-hand axis. Some key features are:

The January - September total of 3.712 billion pounds of pork is 20.6 per cent larger than last year and 2.6 per cent higher than the Jan-Sept total for the previous record year, 2008.

On the beef side, this year’s January - September exports of 2.105 billion pounds is 27.3 per cent larger than last year and 8.4 per cent larger than the January - September figure for the previous record year, 2003. That year was, of course, before a BSE-infected cow was found in the US.

A classification of US pork export markets would still be “Japan and Mexico and then everyone else.” Even with growth to other key markets such as China-Hong Kong, these two are far and away the largest destinations for US pork muscle cuts. China-Hong Kong is a growing market for sure but it still is only as large as “Other” pork export markets and just larger than Canada and Korea this year.

A similar chart for pork variety meats would show that it is “Mexico and then everyone else” while the same kind of chart for the value of pork exports would demonstrate Japan’s importance even more. Mexico, of course, is a price sensitive market in which many “by-products” such as organ meats and skins are part of the cuisine. Japan’s gate-price mechanism forces imported products to have a high value in order to avoid a substantial tariff.

The picture in terms of markets is quite different for the beef sector with four individual markets and the “Other” countries representing major shares. Canada has been the largest single market for US exports this year — a curious fact driven largely by the strength of the Canadian dollar — while Mexico and Japan hold the second and third spots. While shipments to Russia, Hong Kong and Korea are 83 per cent, 55 per cent and 48 per cent larger, respectively, than one year ago, those three markets are still less than half as large as the four leading individual country destinations for US beef.

It is important to note that the beef chart in pre-BSE years would have looked much more like the pork chart with Japan the clear leader and Korea and Mexico well ahead of other destinations, including Canada. Japan’s BSE-related 20-month maximum age requirement and Korea’s even more strident BSE -related restrictions changed that situation dramatically and are still impacting US beef exports.

There has been a lot of talk about Japan moving from 20 to 30 months as the maximum age of the source cattle and observers expect that to happen in the first half of next year. While lower BSE risk is part of that change, the Japanese can clearly see the impacts of this year’s cow reductions and early placements, too.

Further Reading

- Go to our previous news item on this story by clicking here.