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Beef export volume trending lower while value climbs

By Staff | Jun 21, 2015

(IBIC) – After setting an all-time value record of $7.13 billion in 2014, U.S. beef exports have encountered some significant headwinds this year.

Through February, exports totaled 162,890 metric tons an 11 percent decline compared to the same period last year.

But even at lower volumes, export value is still 4 percent ahead of last year’s record pace at $1.04 billion.

A major factor slowing beef exports in the first two months of 2015 was a labor dispute that resulted in significant congestion in U.S. West Coast ports.

This greatly impacted beef shipments to Asian markets, especially chilled beef destined for Japan, South Korea and Hong Kong.

Because chilled beef has a shelf-life of about 60 days, shipping delays create significant problems for importers and distributors.

As the labor dispute dragged on, these buyers became increasing reluctant to place chilled orders.

West Coast longshoremen reached a tentative contract agreement with port operators on Feb. 20, and port traffic is gradually improving.

February beef exports were still lower year-over-year, but showed improvement from January.

“There was not much relief from the shipping backlog until March, and container traffic in some ports still has not returned to normal,” said U.S. Meat Export Federation director from Iowa, Roger Brummett, chair of the Iowa Beef Industry Council. “However, the new labor contract agreement definitely sent positive signals to our Asian buyers and allowed the U.S. meat industry to begin the process of putting this crisis behind us.

“The momentum exports regained in February is encouraging, and we’re looking forward to further improvement when March results are published.”

Beef exports to Japan rebounded significantly in February, up 11 percent from a year ago in volume – 15,933 mt – and 23 percent in value – $112.6 million.

The trend was similar for South Korea, as February exports were up 16 percent in volume – 10,899 mt- and 24 percent in value – $80.4 million.

Beef exports to Mexico posted another strong month in February, driven by large beef variety meat exports. February exports to Mexico were up 7 percent – 18,555 mt- and up 5 percent in value -$93.6 million.

“Demand for U.S. beef is strong in Japan and Korea,” Brummett said, “but these are intensely competitive markets.

“Australian beef has gained a significant tariff rate advantage in Japan through the economic partnership agreement that came into effect this year, and both Australia and Canada have narrowed the tariff rate gap in Korea through free trade agreements.

“The impact of these tariff rate changes is compounded by the strength of the U.S. dollar versus the Australian and Canadian currencies.”

U.S. beef continues to have success in Central and South America.

Recently implemented free trade agreements have helped Panama and Colombia emerge as promising markets, joining mainstay destinations Chile, Peru and Guatemala.

Last year, U.S. beef regained access to Ecuador and Uruguay for the first time since 2003.

The Iowa Beef Industry Council contributes beef checkoff funds to the USMEF through at the national and state level.

U.S. beef exports added $300 to the value of a fed steer in 2014 with 14 percent of the total U.S. beef production being exported.

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