Source: Rita Jane Gabbett, MEATINGPLACE, 12/16/16


U.S. meat and poultry exports continue to climb despite the strong U.S. dollar, USDA noted in its most recent Livestock, Dairy and Poultry Outlook report.  

The Broad Dollar Index of the Federal Reserve Bank is significantly higher this year and in 2015 compared to the average of 2000-2005. Despite higher U.S. dollar index values, export shares of U.S. animal proteins have mostly increased since 2000-2005.

Lower U.S. animal protein prices from supply increases have helped to offset the negative effects of U.S. dollar appreciation. Foreign demand for U.S. animal protein products has also increased due to foreign income and population gains and from negative supply shocks, like the recent one in China’s pork sector.

Beef
U.S. beef exports were 229 million pounds in October, almost 17 percent above exports a year ago. It is notable that the first five countries on the list—Japan, South Korea, Mexico, Hong Kong, and Canada—together accounted for almost 80 percent of U.S. beef exports in October. This is down slightly from October 2015, due mainly to increased exports to Taiwan and the Philippines.

U.S. beef exports to Japan were 36 percent higher, year-over-year in October. Japanese trade data suggests that higher imports of U.S. beef are coming at the expense of Australia and New Zealand, both of whose beef exports are lower due to ongoing cattle herd rebuilding.

Australia’s beef exports were off by almost 21 percent through September. New Zealand’s beef exports through September were almost 6 percent lower than 2015.

Asian markets— which accounted for 65 percent of U.S. beef exports in October versus 57 percent last year—are responding to the lower U.S. beef prices that accompanied the 6-percent increase in U.S. beef production since mid-year.
With continued increases in production and lower expected prices, fourth-quarter beef exports are expected to be 670 million pounds, almost 13 percent higher than a year ago.

Pork
U.S. pork exports in October were 451 million pounds, more than 9 percent higher than a year ago. Exports to Mexico, in particular, were especially strong, likely due to the approaching Christmas-New Year holiday, and attractive U.S. prices offsetting some of the negative effects of a depreciating peso.

China was the fourth largest U.S. pork export market in October, though with little year-over-year growth. China import data suggest that import demand has topped out for the moment.

Notably the unit value of Chinese imports of U.S. pork is higher than unit values of Canadian, German, Spanish, Dutch, and Chilean imports, valued in U.S. dollars. Part of the reason could be that China imports different valued cuts, from different countries.

Poultry
October exports of broilers, turkey, and egg/egg products in October performed favorably compared to a year earlier, despite small declines from September levels.

October exports of broilers to Mexico were 18 percent of total exports but were lower than recent months. An ongoing depreciation of the peso worsened in September and November, lowering Mexican purchasing power of U.S. products.
Angola accounted for 7 percent of October broiler exports, continuing their strong upward momentum since September.
The main markets for U.S. turkey this year, Mexico and Hong Kong, were both down from September.

For more stories, go to www.meatingplace.com.