Beef Export Value Sores in Early 2018

Beef Export Value Sores in Early 2018

June 11, 2018
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Beef Export Value Sores in Early 2018

Exporting beef produced in Iowa continues to be an important driver for the state’s agricultural economy – and creating demand for our quality products requires a team effort across the globe.

“The Iowa Beef Industry Council (IBIC) invests checkoff funds in the international markets as a way to advance the mission to grow demand for beef internationally. The partnership with U.S. Meat Export Federation (USMEF) assists in extending our marketing efforts in over 120 countries with multiple buying groups. This just makes good sense for Iowa’s beef producers,” adds Chris Freland, Executive Director for IBIC.

Before we describe some of the efforts being undertaken on behalf of Iowa beef producers in key international markets, let’s look at beef export numbers from the first quarter of 2018. U.S. beef exports were 9 percent ahead of the 2017 pace in volume (318,073 metric tons) and jumped 19 percent in value ($1.92 billion). Exports accounted for 13.2 percent of total first-quarter beef production and 10.7 percent for muscle cuts, up from 12.4 percent and 9.8 percent, respectively, last year. Beef export value averaged $315.67 per head of fed slaughter, up 18 percent year-over-year.

Asian markets remain key

Asian countries continue to be big buyers of U.S. beef. Through the first quarter of this year, export volume to South Korea was up 22 percent from a year ago to 51,909 metric tons, while value was 37 percent ahead of last year’s record pace at $366.3 million. Chilled beef exports to Korea accelerated at an even faster rate, increasing 34 percent from a year ago in volume (11,408 metric tons) and 44 percent in value ($107.9 million).

Japan, a market that consistently delivers tremendous value for Iowa’s cattle producers, experienced a slight setback in the first quarter – mainly due to the frozen beef safeguard triggered last year. In August 2017, the Japanese frozen beef safeguard mechanism raised the duty charged on imports of frozen U.S. beef from 38.5 to 50 percent through March 2018. With the higher tariff weighing on frozen product, total exports (chilled plus frozen) to Japan dropped three percent to 72,440 metric tons. However, value still increased 8 percent to nearly $460 million.

“We see that as a clear indication of the strong demand for high quality beef in Japan, despite the safeguard,” said Dan Halstrom, president and CEO of the U.S. Meat Export Federation (USMEF), which uses funding from the Beef Checkoff Program, the USDA Market Access Program (MAP) and state beef councils to promote U.S. beef around the world.

Halstrom noted that the U.S. continues to maintain majority market share of exported chilled beef to Japan, driven by shifts in popular foodservice and Western-style trends.

Other key Asian markets also demonstrated a growing demand for U.S. beef in the first quarter. Exports to Taiwan increased 34 percent in volume (13,067 mt) and 48 percent in value ($126.7 million). This included a 61 percent increase in chilled beef exports (5,860 mt), valued at $74.4 million (up 72 percent). The United States holds 74 percent of Taiwan’s chilled beef market, the highest of any Asian destination.

Exports to China/Hong Kong climbed 34 percent in volume (35,060 mt) and 61 percent in value ($269.1 million).

While Southeast Asia is made up of smaller markets, there has been significant growth in U.S. beef exports to Indonesia, the Philippines and Vietnam.

Mexico Still a Major Beef Customer

Mexico remains a consistently strong buyer of U.S. beef. First-quarter exports to Mexico were steady with last year in volume at 57,039 mt and climbed 10 percent in value to $250.3 million. It is important to note that Mexico is the leading volume destination for U.S. beef variety meat, including tripe, hearts, kidneys and livers. While first-quarter variety meat exports to Mexico declined 4 percent in volume (25,921 mt), they still achieved a 17 percent increase in value to $60.5 million.

Elsewhere in the Western Hemisphere, exports to both South America and Central America were up significantly in the first quarter. Major destinations include Chile, Peru, Colombia and Guatemala. 

The Iowa Beef Industry Council and the National Beef Checkoff Program have remained committed to increasing the demand for beef products in other countries. Investment through USMEF allows the group working to conduct the promotions necessary to demonstrate the value of U.S. beef worldwide. More information about checkoff-funded export programs and activities conducted through the U.S. Meat Export Federation can be found at www.usmef.org

 

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About the Iowa Beef Industry Council:  The Iowa Beef Industry Council is funded by the $1-per-head National Beef Checkoff Program and $0.50 per head Iowa State Beef Checkoff.  Checkoff dollars are invested in beef promotion, consumer information, research, industry information and foreign market development, all with the purpose of strengthening beef demand.  For more information, visit www.iabeef.org