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US red meat exporters enjoy boost from Korea

By Rod Addy+

09-Jul-2015

US beef exports to South Korea remained strong in May
US beef exports to South Korea remained strong in May

Korea offers hope to US beef and pork exporters after international trade lost momentum in May, falling below levels for last year in both volume and value.

US beef exports moved counter-seasonally lower in May, dropping 14% lower than the same period a year ago to 88,466 tonnes (t), according to data released by the US Department of Agriculture (USDA). The figures were compiled by the US Meat Export Federation (USMEF).

Export value dipped lower year-on-year for the first time since January, reaching only $556.7 million (down 6%). In January to May, exports totalled 430,393t, down 10% from the same period in 2014. However, export value still remained ahead of last year’s pace at $2.68 billion (up 2%), the USMEF data indicated.

By contrast, beef exports to South Korea remained strong in May, increasing by 5% from a year ago in volume (9,740t) and 11% in value ($64.8m). This pushed January-May exports to Korea 4% higher in volume (48,568t) and 9% higher in value ($341.9m), according to the USMEF.

Short-term slowdown

However, the market could see a short-term slowdown due to the toll the recent outbreak of Middle East respiratory syndrome (MERS) has taken on consumer spending in Korea, it warned. MERS was first diagnosed in Korea on May 20, but became a major public health concern in early June.

“Although MERS is not a food safety issue, its impact on Korea’s restaurant sector was dramatic in June,” explained Philip Seng, USMEF president and CEO. “Fortunately our staff in Korea reports that the situation has improved significantly this month, with consumer activity beginning to return to normal.

“We expect beef demand in the Korean market – which is one of our strongest performers in 2015 – to rebound fairly quickly.”

In addition, Korea’s domestic beef prices soared to near-term highs in June, reflecting relatively tight supplies, auguring well for US supplies.

Pork exports

Meanwhile, US pork exports totalled 184,865t in May, down 2% from a year ago, while value slipped a whopping 18% to $489.2m. In the first five months of 2015, pork exports were down 6% in volume (910,967t) and 15% in value ($2.42bn) compared with the same period last year.

But while pork exports to Korea cooled slightly in May, they maintained a very strong pace, with volume up 38% to 95,686t and value up 37% to $285.1m.

Pork demand also took a short-term hit due to MERS. However, they are expected to be strong in coming months as domestic production is taking longer than expected to recover from the impact of recent outbreaks of Porcine epidemic diarrhoea virus and foot and mouth disease.

Results for US beef in other Asian markets have been mixed so far in 2015, with most struggling to keep pace with last year’s import volumes.

Hong Kong

Exports to Hong Kong fell 17% in volume and 8% in value. Exports to Taiwan grew by 13%, despite a single digit volume decline.

Although beef exports to the Association of South East Asian Nations (ASEAN) region were down 23% in volume, export value was still up 14%.

While beef export value had managed to stay in positive territory in most Asian markets, Seng cautioned that the US industry faced a volatile business climate.

“Lack of access to China, which never reopened after the 2003 BSE case, is definitely holding back our export growth,” he said.

China

Four years ago, China’s beef imports totalled only $112m for an entire calendar year. From January to May of this year, imports exceeded $700m – up 17% from the record pace of 2014. Primary suppliers are Australia, Uruguay, New Zealand and Argentina.

Similarly, limited access to China, which only a small number of US pork plants are eligible to serve, continued to dampen pork exports to the China/Hong Kong region, the USMEF claimed.

The European Union was dominating the region’s imported pork market, accounting for nearly 70% of pork entering China/Hong Kong, it stated.

Export volumes to the ASEAN region were halved and fell by more than half in terms of value, hit by “the tremendous influx of lower-priced European pork”, said Seng.

After hitting a low point for the year in April, May US lamb exports rebounded to some degree, the USMEF said.

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