US red meat exports are facing challenges related to a strong US dollar and competition from abroad that threaten to reduce shipments in coming months.
An overall increase in the value of the US dollar, weakening economies around the world and increased competition from other exporting countries make US meat exports more challenging.
First-half red meat exports show those challenges with the added choke point of the West Coast port labor slowdown, and some of these issues remain in place to bedevil second-half shipments.
USDA data compiled by the US Meat Export Federation illustrate the challenges faced by the US industry.
Beef and beef variety meats exports in June totaled 96,716 tonnes, down 9,893, or 9.28%, from 106,609 tonnes in the year-ago month. The value of these exports was $578.9 million, down $52.7 million, or 8.35%, from last year’s $631.7 million.
But first-half beef exports illustrate beef’s tougher sell better than the one-month data. Through June, the US has exported 527.1 tonnes of beef, a decline of 58,844 tonnes, or 10.0%, from 586.0 million in 2014.
However, the cost of that beef to importers was near unchanged at $3.257 billion, compared with $3.269 million a year earlier. In other words, it took nearly the same amount of money to buy 10% less beef.
Spending the same amount to get less product is a classic sign of strong demand, but the outside influences behind the move are still in place or are strengthening, turning what seems like strong demand into a more ominous picture – like maybe buyers will grow weary of spending the same to get less product.
A general decline in beef exports can be seen in weekly export data that was compiled by the Livestock Marketing Information Center.
In reality, US beef exports have been declining slowly for a year. Weekly gyrations tend to mask the overall slippage, but the long-term effect is still present.
LOWER PRICES DON’T PUSH PORK EXPORTS
The picture is even worse for US pork exports where prices and volume are down.
June pork and pork variety meat shipments were down 6,977 tonnes, or 3.84%, to 174,554 from 181,531 a year earlier. These exports were valued at $454.1 million, $131.1 million, or 22.4%, less than the $585.1 million a year ago.
Through June, US pork export volume was down 60,641 tonnes, or 5.29%, to 1.086 million from 1.146 million. These exports were worth $2.877 billion, $553.1 million, or 16.1%, less than last year’s $3.430 billion.
So first-half US pork exports lost more in value than in volume.
Philip Seng, president and CEO of the USMEF, said in a statement that second-quarter exports were softer than officials there had targeted. In addition, US marketing budgets remain flat while efforts by competing countries are heating up.
CASH FED CATTLE TRADE QUIET
Cash cattle markets were quiet Monday as traders watched the stock market tumble.
Cattle last week were $3 to $4 per cwt lower on a live basis at mostly $145 to $147.50 with some in Nebraska up to $149. Cattle also traded at $232 to $234 on a dressed basis last week, about $2 to $4 lower.
The USDA reported lower boxed beef prices Monday with choice down $0.59 per cwt at $244.31 and select off $0.90 at $233.98.
The CME Feeder Cattle Index for the seven days ended Friday was $214.31 per cwt, down $0.94. This compares with the Aug settlement Monday of $210.82, down $1.17.