Russian Trade Barriers Hold Back Beef, Pork

U.S. Meat Export Federation reports lagging April exports of U.S. beef and pork, though figures are higher than last month

Published on: Jun 10, 2013

While overall trends for beef and pork exports are sluggish, positive signs are appearing in importing markets, the U.S. Meat Export Federation said last week, based on the latest USDA figures.

Market access issues continue to be top-of-mind for exporters. Russia's suspension of imports of U.S. beef and pork, which officially closed the market Feb. 11, continues to hamper overall performance.

USMEF estimates this trade impasse, which is related to Russia's enforcement of a zero-tolerance policy for beta agonist use, has cost the U.S. industry about $97 million in beef export value and $58 million in pork export value so far in 2013.

U.S. Meat Export Federation reports lagging April exports of U.S. beef and pork, though figures are higher than last month
U.S. Meat Export Federation reports lagging April exports of U.S. beef and pork, though figures are higher than last month

"Along with our lack of access to sell beef in mainland China, this is the biggest barrier we face in terms of market access," said Seng. "One often overlooked factor is the effect this suspension has on the price U.S. products command in markets other than Russia.

"For example, beef livers to Egypt have increased in volume, but the value is down. There is also downward pressure on the prices offered for rounds, hams and pork for further processing. The impact is much broader than many analysts realize at first glance."

Beef

April beef export volume of 86,433 metric tons was down 9% from a year ago and export value was down 7% to $434.8 million. For January through April, beef exports were 2% higher in value ($1.75 billion) despite a 5% decline in volume (343,020 mt).

Through April, beef exports equated to 9% of U.S. muscle cut production and 12% including variety meat – down from last year's ratios of 9.6% and 12.7%. Export value equated to $217.54 per head of fed slaughter, up 3% from the same period last year.

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Beef exports were up in Japan as the country regained leading position as top market for U.S. beef for the first time since 2003. Overall, they moved 49% higher in volume and 44% higher in value for the year.

"Many observers felt USMEF's growth projections for Japan were overly bullish," Seng said. "But we were keenly aware of the unmet demand from existing buyers and the opportunities to secure new business once we had a wider supply available. This shows once again the importance of having experienced staff on the ground who know how to direct marketing resources in a way that will maximize results."

While Japanese growth is encouraging, USMEF President and CEO Philip Seng said a safeguard that can increase tariffs if beef import volumes rise too quickly in the country, is still an important consideration for U.S. exporters.

Hong Kong maintained its rapid growth and Taiwan regained momentum from last year's slowdown as well.

Exports to Hong Kong, which also recently expanded access for U.S. beef to include bone-in cuts and some products from cattle over 30 months of age, soared by 87% in volume and 79% in value in the first four months of the year.

While exports to Taiwan slowed in 2011 and 2012 due to an impasse over beta agonists, this year's January-April exports exceed the pace achieved when this market was performing at its peak, with exports beating last year's pace by 84% in volume and 129% in value.

Exports were hampered, however, in Mexico and South Korea. In the case of Mexico, the price point relative to other competing proteins continues to be an issue that has proven difficult to overcome as exports declined 22% in volume and 25% in value compared to a year ago.

In Korea, the main issue is an oversupply of domestic protein, which has created a difficult climate for imported products. Exports to Korea were down 20% in volume and 9% in value.

Pork

Mexico showed double-digit growth in April for pork, this following a slow start to the year. Central and South America, the ASEAN region and the Caribbean all grew 30% or more for April.

April pork exports totaled 174,073 mt valued at $475.1 million – down 5% and 7%, respectively, from a year ago. Through the first four months of the year, pork exports were 10% below last year's pace in both volume and value.

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Pork exports accounted for 21% of muscle cut production and 25.3% including variety meat. This is down from 24.6% and 28%, respectively, during the first four months of 2012. Export value for the first four months of 2013 equated to $52.72 per head slaughtered, down from last year's pace of $58.84.

While January-April pork exports to Mexico were down 8% in both volume and value compared to last year, April proved to be a very strong month as volume increased 19% and value was up 20%.

Demand also improved in Canada, Columbia, Chile and the Dominican Republic.

"It is gratifying to see U.S. pork performing so well in our neighboring markets, and the April recovery in Mexico was especially critical," Seng said. "The strong results in Mexico and Canada really underscore the importance of resolving our issues with country-of-origin labeling so that our exports don't face retaliatory measures from these trading partners."

However, coming off a $2 billion performance last year, pork exports to Japan have struggled to maintain this pace in 2013. Through April, exports were down 12% in volume and 9% in value.

Lamb

January-April exports of U.S. lamb increased 3% in volume and 22% in value from a year ago, led by strong results in Mexico.

Exports to Mexico increased only slightly in volume but posted a 32% increase in value to $5.4 million. Global exports of lamb variety meat, a key contributor to carcass value, increased 18% in volume and 35% in value, led by a strong performance in Canada and the Middle East.

News source: USMEF