WASHINGTON, D.C. — June meat export numbers "reflected a challenging first half of 2015 for U.S. pork, beef and lamb exports," according to the USDA and data compiled by the U.S. Meat Export Federation (USMEF).
"We were aware that exports would be facing obstacles in 2015, and that keeping pace with last year’s record performance would be difficult," said Philip Seng, USMEF president and CEO. "The first-quarter slump was partially due to the West Coast port labor impasse, as well as intense competition from countries that continue to recognize opportunities in several markets.
"We were expecting to see a stronger rebound in the second quarter – and that did not materialize."
According to the report, June pork exports totaled 174,554 metric tons (or 192,413 tons), down 4 percent from a year ago. "With pork prices down significantly from last year’s high levels, June export value fell 22 percent year-over-year to $454 million," the report read. "For the first half of 2015, pork exports were down 5 percent in volume (1.09 million metric tons) and 16 percent in value ($2.88 billion)."
The report said January-June pork exports accounted for 25 percent of total production and 21 percent for muscle cuts only (down from 28 and 24 percent, respectively, in the first half of last year). Export value averaged $50.85 per head slaughtered, down 22 percent year-over-year and 5 percent lower than in 2013.
In addition, U.S. beef export volume in June was also down 8 percent from a year ago to 96,716 metric tons, while export value fell 9 percent to $578.9 million.
"This was the second consecutive month that export value fell below last year’s level, resulting in first-half value being steady with 2014’s pace at $3.26 billion. First-half volume was down 10 percent to 527,109 metric tons," the report added.
But while marketing budgets remain flat, Seng said competitors are "beefing up efforts to capture larger shares of the red meat market."
"Competition continues to be a major factor, along with a strong U.S. dollar that is providing a price advantage for several competitors with slumping currencies," he said. "The European Union (EU), for one, has been aggressive in targeting specific markets, and large supplies of European pork are making it into the coveted Asian market.
"This development is due in large part to the closure of Russia, traditionally the EU’s largest pork export market. Russia’s suspen-sion of pork imports from the EU – originally due to African swine fever, but reinforced by a trade embargo related to the conflict in Ukraine – has now lasted more than 18 months."
Moreover, Australian beef production was expected to ramp down in 2015 as the industry entered herd-rebuilding mode after several years of poor grazing conditions.
"But with disappointing rainfall in Australia and attractive slaughter cattle prices, beef production and exports remained record-large through the first half of the year – though some slowdown was seen in July," the report stated.
Conversely, the report said June pork exports to Mexico were the largest since March, up 13 percent from a year ago to 62,112 metric tons: "While first-half export value ($619.3 million, down 18 percent) reflected lower prices for hams and other cuts typically shipped to Mexico, export volume remained very strong (353,296 metric tons, up 6 percent)."
In addition, pork exports to South Korea moderated in June to 12,512 metric tons, up 55 percent from a year ago but the smallest volume since November 2014. June export value was $33.1 million, up 17 percent. Korea’s first-half performance was stellar, with volume increasing 40 percent to 108,198 metric tons, and value up 35 percent to $318.2 million.
The report also said U.S. lamb exports endured a difficult first half of 2015 but volume improved in June, increasing 9 percent from a year ago to 1,076 metric tons. Despite this, June export value was still down 30 percent to $1.8 million.
Like Seng, Dave Miller, Iowa Farm Bureau Federation economist and director of research, said there were a variety of factors that contributed to a challenging first half of the year for U.S. farmers selling beef, pork and lamb into export markets.
"A significantly stronger dollar offset sharply lower prices for U.S. pork and exacerbated the challenges of record-high beef prices," he explained. "Added to this was the slowdown or shipping stoppages on the West Coast that prevented normal movement of meats to our established markets.
"Most concerning is the lack of a rebound in movement once the labor dispute was settled, as it appears that some of our meat customers now deem us not as a reliable supplier as we were prior to the labor dispute. Building markets is hard work and interruptions in shipments can undo years of work that has been spent building customer confidence and loyalty.
"U.S. farmers will now have to work even harder to rebuild the demand that has been lost."
To view the full report, visit http://bit.ly/1KpoXJ7
