Livestock

U.S. beef exports set a new value record in May while also increasing significantly year-over-year in volume, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). May pork exports were lower than a year ago, though January-May totals for U.S. pork remained ahead of last year’s pace. Beef export volume was 117,871 metric tons (mt) in May, the sixth-largest on record, valued at a remarkable $722.1 million, which surpassed the previous monthly high (March 2018) by a healthy 4 percent and was 24 percent higher than a year ago. Through the first five months of 2018, beef exports were up 10 percent in volume to 547,157 mt while export value was $3.32 billion, 21 percent above last year’s record pace. Exports accounted for 13.6 percent of total beef production in May, up from 13 percent a year ago. For muscle cuts only, the percentage exported was 11.1 percent, up from 10 percent last year. For January through May, exports accounted for 13.5 percent of total beef production and 10.9 percent for muscle cuts – up from 12.8 percent and 10 percent, respectively, last year. Beef export value averaged $313.39 per head of fed slaughter in May, up 18 percent from a year ago. The January-May average was $317.69 per head, also up 18 percent. Following a record performance in April, May pork export volume was 217,209 mt, down 2 percent from a year ago and reflecting smaller exports of variety meats. Export value was $562.5 million, down 3.5 percent. For January through May, pork export volume was still 3 percent ahead of last year’s record pace at 1.08 million mt, while value increased 6 percent to $2.85 billion. Exports accounted for 27.8 percent of total pork production in May, down from 29.5 percent a year ago, while the percentage of muscle cuts exported fell about one percentage point to 24 percent. For January through May, the percentage of total production exported was slightly below last year at 27.5 percent, while the percentage of muscle cuts exported increased slightly to 23.7 percent. May pork export value averaged $55.05 per head slaughtered, down 6 percent from a year ago. The January-May per-head average was $55.57, up 2 percent from last year. Japan, Korea lead the way as global demand for U.S. beef continues to climb Japan and South Korea continue to be the pacesetters for U.S. beef export growth. In May, export volume to Japan totaled 30,117 mt (up 19 percent from a year ago) valued at $196.8 million (up 22 percent and the highest since August 2017). Through May, exports to Japan were up 4 percent from a year ago in volume at 128,207 mt while value increased 13 percent to $822.9 million. This included a 6 percent increase in chilled beef volume to 61,178 mt, valued at $488 million (up 18 percent). May exports to Korea were up 46 percent from a year ago in volume (20,781 mt) and jumped 64 percent in value to a record $146.2 million. For January through May, exports to Korea climbed 34 percent to 91,875 mt, valued at $647.3 million – 49 percent above last year’s record pace. Chilled beef exports to Korea totaled 20,365 mt (up 30 percent) valued at $196 million (up 41 percent). “Despite the intense competition U.S. beef faces in Japan and Korea, these markets continue to display a terrific appetite for a growing range of cuts,” said USMEF President and CEO Dan Halstrom. “Beef items that are traditionally popular in Asia continue to perform and other items more suitable for thick-cut steaks and barbecue concepts are gaining more traction, resulting in exceptional growth opportunities. But the enthusiasm for U.S. beef extends well beyond these two leading markets, and that’s how exports have reached this record-breaking pace.” For January through May, other highlights for U.S. beef include: In Mexico, exports were up 4 percent in volume (98,900 mt) and 13 percent higher in value ($427.9 million). Mexico is a critical market for U.S. rounds, shoulder clods and other muscle cuts which are typically undervalued in the U.S. market. It is also the leading destination for U.S. beef variety meat exports, which increased 15 percent from a year ago in value ($98.9 million) despite a 2 percent decline in volume (43,479 mt). Exports to China/Hong Kong increased 20 percent in volume (57,186 mt) and 47 percent in value to $442.2 million. May exports to China were the largest (834 mt) since the market opened in June of last year, pushing the January-May total to 3,133 mt valued at $28.7 million. However, effective July 6, China’s import duty rate on U.S. beef increased from 12 percent to 37 percent. The higher tariff will make it difficult for end-users to profitably utilize U.S. beef, especially with U.S. beef already priced at a premium compared to imports from other suppliers and with Australian beef subject to a duty of just 7.2 percent through the China-Australia Free Trade Agreement. Coming off a record performance in 2017, beef exports to Taiwan continue to gain momentum. Exports were up 31 percent from a year ago in volume (22,127 mt) and 43 percent higher in value ($209.9 million). Chilled exports increased 39 percent in volume (9,272 mt) and 52 percent in value ($116 million), as U.S. beef captured 74 percent of Taiwan’s chilled beef market. More reliable access to Indonesia has helped bolster beef exports to this promising market, with volume increasing 52 percent from a year ago to 6,247 mt and value nearly doubling to $28.7 million. Due in part to the United States successfully challenging Indonesia’s import restrictions at the World Trade Organization, U.S. beef now faces fewer obstacles and a more consistent regulatory environment. Indonesia’s strong performance and solid growth in the Philippines helped push exports to the ASEAN region 17 percent higher in volume (18,472 mt) and 28 percent higher in value ($102.4 million). Led by strong growth in Guatemala, Costa Rica and Panama, exports to Central America jumped 21 percent in volume (5,436 mt) from a year ago and 22 percent in value ($30.6 million).

In a detailed letter to the U.S. Roundtable for Sustainable Beef (USRSB), critics claim the platform presented for review earlier this year fails to “address key structural issues related to sustainability and the most damaging impacts of the cow-calf and feedyard phases of production.” Fifty organizations signed on to the letter, including the National Grassfed Organization, Earthjustice, the Sierra Club, GMO Free USA, Friends of the Earth, Food and Water Watch, several Catholic organizations, and the Organization for Competitive Markets. The letter states the USRSB platform “will not help the U.S. beef sector — either individual producers or the entire industry — realize its great potential to minimize the severe environmental, climate, public health, animal welfare and other impacts of poorly managed cow-calf and feedyard operations.” The framework is a set of resources, developed over more than three years, to help the supply chain from ranchers to retailers continuously improve the sustainability of U.S. beef. The comment period ended July 1. According to the USRSB, the framework highlights key areas important to the sustainability of beef and examines unique opportunities for each segment of the beef value-chain to identify opportunities to improve and reflect on their individual progress. Most importantly, the Framework is not a one-size-fits-all approach. It is designed to address the needs of the diverse beef communities who produce, buy and sell beef. The key areas identified by the USRSB as being important to the sustainability of beef are referred to as High-Priority Indicators. These include: animal health and well-being, efficiency and yield, employee safety and well-being, land resources, water resources, and air and greenhouse gas emissions. Sustainability Metrics and Sustainability Assessment Guides serve as the segment-specific elements of the Framework tailored to address the unique challenges in the cow-calf, cattle auction market, feedyard, packer and processor, and retail and foodservice sectors. However, the critics of the framework stated in the letter on June 27, 2018, “Most of these benefits are generated by well-managed grass-based and grass-finished livestock systems—yet the framework does not explicitly recognize, incentivize or otherwise support these far more sustainable grass-based and grass-finished systems.” While supporting grass-based livestock systems, the critics also denounced what they described as USRSB’s “failure to address the consolidated structure of the U.S. beef marketplace, which depresses producer prices for conventional meat and keeps sustainable beef from being produced and reaching consumers.”

Anthrax has been confirmed in the death of a dozen cattle in South Dakota. Eight cows died suddenly last week in a herd of 87 in Clark County, and four adult cattle died in a herd in Bon Homme County. State Veterinarian Dr. Dustin Oedekoven says neither of the two herds were vaccinated against anthrax. Anthrax spores survive indefinitely in contaminated alkaline soils and nearly all areas of South Dakota. The Animal Disease Research and Diagnostic Laboratory at South Dakota State University confirmed the disease from samples submitted over the weekend. Anthrax can cause the rapid loss of a large number of animals in a short time. Infected livestock often are found dead with no illness detected. The South Dakota Animal Industry Board says strict enforcement of quarantines and proper burning and burying of carcasses suspected to have died from anthrax is important to prevent further soil contamination from bacterial spores. Producers across the state should consult their veterinarians and vaccinate livestock, if deemed appropriate.

After a record performance in 2017, U.S. pork exports to Central America, South America and the Dominican Republic have continued to gain momentum this year. In the audio report below, U.S. Meat Export Federation (USMEF) Trade Analyst Jessica Spreitzer notes that even in markets where domestic pork production is on the rise, consumption is increasing at an even faster pace, leading to expanded opportunities for U.S. pork. Spreitzer said demographic trends are helping drive pork demand in these markets, but she also emphasized the importance of key trade agreements such as the Dominican Republic-Central America-Free Trade Agreement (CAFTA-DR) and bilateral agreements with Chile, Colombia, Panama and Peru. These agreements have greatly improved market access for U.S. pork in Latin America and helped fuel strong growth in U.S. market share. Through April, U.S. pork exports to South America are up 23 percent from a year ago in volume to 39,520 metric tons (mt) and 24 percent in value to $96.7 million. Led by mainstay markets Honduras and Guatemala and sharply higher shipments to Panama, exports to Central America climbed 23 percent in volume (26,459 mt) and 27 percent in value ($63.3 million). In the Dominican Republic, exports totaled 13,612 mt (up 20 percent) valued at $30.8 million (up 22 percent).

Advances in pork production technologies and international trade opportunities were the dominant themes at the 2018 Illinois Pork Tour, conducted June 4-6 by the Illinois Department of Agriculture. Forty-three pork producers and international buyers from 10 Asian and Latin American countries participated in the tour, which has the objective of building relationships with trading partners and promoting exports for the Illinois pork industry. The annual event, now in its 24th year, has generated combined sales of $13.5 million. “Participants were impressed with all the technology they saw and asked a lot of questions at each stop,” said Bobby Dowson, an international marketing representative with the Illinois Department of Agriculture, who accompanied the group. Participants represented China, Laos, Myanmar, Argentina, Brazil, Colombia, Ecuador, Mexico, Peru and the Dominican Republic. International trade concerns were also a topic of discussion, particularly among the participants from China. “It’s certainly a concern, as all of the trade mission delegates recognize the importance and value of international trade,” Dowson said. “They’re hoping it can all be worked out.” He noted that China ranks as the world’s leading pork producer, and its need for pork production technologies is expected to increase. Pork Production Plant Tour One of the tour stops was at GSI’s AP (Automated Production Systems) manufacturing plant in Taylorville, Illinois, which produces environmental controls, feeding delivery systems and other products used in pork production. “AP is a global brand doing business in all of the regions represented on the Illinois Pork Tour,” said Tom Stuthman, General Manager, GSI Protein-North America. “We were pleased to be a part of the event because it offers the opportunity to meet with current and potential international customers, and to learn how we can best meet their needs.” Raymond Poe, Illinois Agriculture Director, greeted the delegation at the AP plant, noting that the state ranks fourth in the U.S. in pork production. “The Illinois pork industry has a tremendous export presence around the world,” he added. “Through trade missions such as this, we hope to not only increase pork exports but also agribusiness exports for the pork industry.” Other stops on the tour included Cedar Ridge farm in Red Bud, one of the nation’s top sellers of purebred breeding stock; the University of Illinois College of Agricultural, Consumer and Environmental Sciences; the Chicago Board of Trade, and Amlan International, which provides natural disease management solutions for livestock. After wrapping up the tour, the delegation headed to Des Moines to attend the 2018 World Pork Expo.

April exports of U.S. pork, beef and lamb were sharply higher than a year ago in both volume and value, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF). Pork exports set a new volume record, fueled by tremendous demand in Mexico, while beef exports posted the best-ever results for the month of April. April pork export volume was 230,049 metric tons (mt), up 13 percent from a year ago and topping the previous high set in November 2016. April export value was $584.1 million, also up 13 percent. For January through April, pork export volume was 4 percent ahead of last year's record pace at 866,346 mt, while value increased 9 percent to $2.29 billion. (For pork muscle cuts, excluding variety meat, April was also a record volume month at 184,487 mt, up 18 percent from a year ago. Muscle cut export value was $480.6 million, up 14 percent.) Exports accounted for nearly 30 percent of total pork production in April, up from 28.4 percent a year ago, while the percentage of muscle cuts exported also increased significantly (25.8 percent, up from 23.5 percent). Through April, the percentage of total production exported was fairly steady with last year at 27.4 percent, while muscle cuts jumped from 22.8 percent to 23.5 percent. April pork export value averaged $58.45 per head slaughtered, up 6 percent from a year ago, while the January-April average increased 5 percent to $55.69. Beef export volume was 111,213 mt in April, up 11 percent year-over-year. Export value was $676.7 million, up 23 percent and the fourth-highest on record. Through the first four months of 2018, exports were up 10 percent in volume to 429,286 mt. Export value was $2.59 billion, 20 percent above last year's record pace. Exports accounted for 14.1 percent of total beef production in April, up from 13.6 percent a year ago. For muscle cuts only, the percentage exported was 11.3 percent, up from 10.6 percent. For January through April, exports accounted for 13.4 percent of total production and 10.8 percent for muscle cuts, each up about half a percentage point from last year. Beef export value averaged $328.46 per head of fed slaughter in April, up 16 percent from a year ago. Through April, per-head export value averaged $318.91, up 17 percent. Even with growth in red meat production, both pork and beef exports have accounted for a larger share and contributed more dollars per head, indicating strong international demand. Huge Month for Pork to Mexico; Exports to Korea Continued to Surge Mexico was again the pacesetter for pork exports in April, with volume reaching 79,019 mt - up 34 percent from a year ago and the second-largest on record. Export value to Mexico was $134.1 million, up 28 percent. Through the first four months of 2018, exports to Mexico were 7 percent above last year's record volume pace at 282,675 mt, with value up 6 percent to $505.4 million. Maintaining this pace will be challenging, however, with Mexico announcing retaliatory tariffs on imports of most U.S. pork products effective June 5. The tariff rate on chilled and frozen pork muscle cuts is 10 percent until July 5, when it is set to increase to 20 percent. "The outstanding April performance for pork exports to Mexico really underscores the importance of this market to the U.S. industry and how it has been such a reliable trading partner for hams, picnics and other pork cuts," said USMEF President and CEO Dan Halstrom. "USMEF will continue to emphasize the quality and consistency of U.S. pork to red meat customers in Mexico and make every effort to help U.S. suppliers retain their business. But make no mistake about it, the U.S. industry is going to have to fend off competitors who suddenly have a significant tariff rate advantage and see a clear opening into the Mexican market." Pork exports to South Korea continued to build momentum in April, with volume (25,370 mt, up 74 percent) and value ($74.1 million, up 81 percent) increasing significantly from a year ago. Through April, exports to Korea are on a record pace, climbing 44 percent in volume to 94,888 mt, valued at $276.1 million (up 55 percent). Strong growth in consumer demand and duty-free access under the Korea-U.S. Free Trade Agreement (KORUS) have fueled a rapidly expanding presence for U.S. pork in Korea. While pork exports to the China/Hong Kong region were below year-ago levels in April, shipments remained relatively strong despite the additional 25 percent tariff on U.S. pork that took effect April 2. It is likely, however, that the trade impact will show up more dramatically in May export data and in coming months. The tariff increase essentially tripled China's standard rate on frozen pork imports, taking it from 12 percent to 37 percent (the increase does not apply to Hong Kong, which still charges zero duty). April exports to China/Hong Kong were 41,567 mt, down 14 percent from a year ago, but slipped only slightly in value to $95.9 million. For January through April, exports to China/Hong Kong were 15 percent below last year's pace in volume (153,248 mt) but steady in value at $356.6 million. "It is encouraging to see that pork volumes to China/Hong Kong held up fairly well in April, but the tariff disadvantage is still having a negative impact on the U.S. industry and has pressured prices for key export items," Halstrom noted. "It's another situation in which our competitors are capitalizing on the extra cost associated with importing U.S. pork." For January through April, other highlights for U.S. pork include: Exports to leading value market Japan were 1 percent below last year's pace in volume (132,534 mt) but increased 1 percent in value ($544.8 million). This included a 5 percent decrease in chilled pork volume (68,532 mt), valued at $330 million (down 1 percent). Strong growth in Colombia pushed pork exports to South America up 23 percent from a year ago in volume (39,520 mt) and 24 percent in value ($96.7 million). Led by mainstay markets Honduras and Guatemala and sharply higher shipments to Panama, exports to Central America climbed 23 percent from a year ago in volume (26,459 mt) and 27 percent in value ($63.3 million). Pork exports achieved solid growth in the Philippines and more than doubled from a year ago to Vietnam, as exports to the ASEAN region increased 20 percent in volume (15,435 mt) and 31 percent in value ($43.8 million).