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Global demand for U.S. beef continues to soar

published: April 26th 2022
source: USMEF

 

 

U.S. beef exports posted another strong performance in February, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF), led by excellent value growth in key Asian and Latin American markets. Pork exports trended lower year-over-year, as larger shipments to Mexico and Japan did not offset the continued decline in demand from China/Hong Kong. Lamb exports continued to gain momentum, reaching the highest monthly value since 2014. 

“Rarely have we seen so many outside forces creating headwinds for U.S. meat exports and such uncertainty in the global marketplace,” said USMEF President and CEO Dan Halstrom. “Yet consumer demand for high-quality beef, pork and lamb has proven resilient, and USMEF sees opportunities for further growth in both established and emerging markets.”

Beef exports totaled 108,501 metric tons (mt) in February, up 5% from a year ago, while value climbed 35% to $904.4 million. Through the first two months of the year, exports increased 9% to 227,567 mt, while value soared 46% to $1.93 billion. 

“Broad-based growth has become a recurring theme for U.S. beef exports, as international demand has never been higher and global supplies remain tight,” said Halstrom. “We anticipated a lift from COVID-related foodservice restrictions being eased in many destinations. This materialized late last year and in early 2022, although conditions still vary by country. While lockdowns in China and Hong Kong are certainly a setback for foodservice demand, those are the main exceptions as most countries have shifted to more of a living-with-COVID approach.” 

Demand for U.S. pork did not fare as well in the first two months of 2022, as logistics challenges were compounded by lower-priced offerings from competitors. Like the U.S., these suppliers are shipping significantly lower volumes to China/Hong Kong, which has pushed more product into other markets at reduced prices. 

February pork exports were 198,539 mt, down 17% from a year ago, while export value fell 14% to $541.3 million. Through February, exports were also down 17% in volume (407,347 mt) and 14% in value ($1.1 billion). 

“European hog prices jumped sharply in March, climbing about 35% compared to February,” Halstrom explained. “While this came too late to impact our February export results, it could lead to more favorable market conditions going forward.”

Beef export value approaches $2 billion after just two months

Following record-large January shipments, beef export volume to leading market South Korea slowed in February but value climbed significantly. February exports to Korea totaled 19,033 mt, down 19% from a year ago, but value still increased 17% to $197.8 million. Through February, exports to Korea are off to a torrid start in 2022, climbing 8% in volume (48,611 mt) and already breaking the $500 million mark in value ($514.2 million, up 57%). Strong retail demand for U.S. beef continues and there is growing optimism for foodservice once Korea works through the current Omicron wave. Although restaurant restrictions have been minimized, consumers still opted to dine at home as COVID cases surged in February and March. 

February exports to Japan were down 5% to 23,553 mt, but value jumped 21% to just under $200 million. Through the first two months of the year, exports to Japan fell slightly (46,489 mt, down 1%) but value increased an impressive 26% to $381.6 million. Strong growth in variety meat exports (tongues, skirts and hanging tenders) mostly offset the slowdown in muscle cut volume where exports continue to be impacted by Japan’s high duty rates. Through the Japan-U.S. Trade Agreement, Japan’s duty on muscle cuts notched down to 24.1% on April 1 while tongues edged lower to 3.8% and skirts/hangers to 4.2%. Fortunately an agreement has been reached to modify Japan’s safeguard, pending parliamentary approval in Japan, which will minimize the future risk of U.S. beef being subjected to a higher snapback duty rate. 

Beef exports to Taiwan got off to a slow start in 2021 before recovering to set a new annual value record. Demand has been far stronger in early 2022, with February exports up 39% to 5,307 mt, while value soared 85% to $64.3 million. Through February, exports to Taiwan increased 60% from a year ago to 12,221 mt and more than doubled in value to $147.4 million (up 101%). It is also USMEF’s understanding that shipping delays in late 2021 partly contributed to the larger volumes materializing in the 2022 data. 

Other January-February results for U.S. beef exports include: 

·       Since U.S. beef gained meaningful access to China in early 2020 through the Phase One Economic and Trade Agreement, beef exports to China/Hong Kong have continued to build momentum. Through February, exports to the region increased 56% from a year ago to 39,492 mt, with value up 87% to $374.8 million. Exports in the first two months of the year averaged 19,746 mt, 11% below the monthly average volume in the second half of 2021. But exports are expected to increase seasonally and as China gets through its current COVID challenges. 

·       Coming off a record performance in 2021, beef exports to Central America continue to trend higher, led by outstanding growth in Guatemala, Panama and Honduras and continued strong exports to Costa Rica. Through February, exports to the region were up 23% to 3,831 mt, valued at $28.1 million (up 50%).

·       Strong demand in Jamaica, the Dominican Republic and the Bahamas pushed beef exports to the Caribbean 32% higher than a year ago at 3,669 mt, while value nearly doubled to $32.8 million (up 98%). While still below pre-COVID levels, recent results reflect a rebound in tourism in the region. 

·       Led by strengthening variety meat shipments to Egypt and muscle cut growth in Qatar, beef exports to the Middle East increased 14% to 12,567 mt. Export value climbed 28% to $47.6 million. 

·       Beef exports to Colombia were up 50% in volume (1,952 mt) and 58% in value ($7.8 million), contributing to 12% value growth into South America (to $23 million). 

·       In addition to rebounding demand in Egypt, larger shipments to Japan, Korea, China/Hong Kong, Gabon, Chile and Vietnam fueled a 7% increase in beef variety meat exports (to 47,817 mt), with value climbing 39% to $195.6 million. 

·       February beef export value equated to $445.95 per head of fed slaughter, up 29% from a year ago. The January-February average was $474.87 per head, up 45%. Exports accounted for 14.1% of total February beef production and 11.6% for muscle cuts, down from the year-ago ratios of 14.4% and 12.3%, respectively. Through February, exports accounted for 14.7% of total production and 12.5% for muscle cuts – each up about one percentage point from a year ago.

 

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