Beef Exports Lose Traction

US beef and beef variety meat exports lost traction in May, with volume and value falling below year-earlier levels, according to USDA data compiled by the US Meat Export Federation.

Year-to-date export values, at $2.68 billion, continue to edge last year’s $2.64 billion by about 2%.  However, the 2015 5-month total volume of 430,393 tonnes falls about 10% short of the 2014 volume of 479,344 tonnes.

For May, the US exported 88,486 tonnes of beef and beef variety meats, down 14,481 tonnes, or 14.1%, from 102,967 tonnes in May 2014.

The value of those exports was pegged at $556.7 million, down 32,533 tonnes, or 5.52%, from $589.3 million a year ago.  It was the first dip below a year ago since January.

The Cattlemen’s Beef Promotion and Research Board said the January-through-May beef exports equaled about 13% of total beef production and 10% of muscle cuts.  These were down 14% and 10.6%, respectively.

 

SOUTH KOREA A BRIGHT SPOT

 

Beef exports to South Korea were a bright spot for the US export program in May, rising 5% in volume from a year ago to 9,740 tonnes from 9,269 a year earlier.  Exports to South Korea were up 11% in value to $64.8 million from 58.5 million a year earlier.

However, an outbreak of Middle East Respiratory Syndrome among Korean cattle has taken on a somewhat larger-than-life role among consumers there, cutting into consumer spending and potentially cutting June beef demand.

“Although MERS is not a food-safety issue, its impact on Korea’s restaurant sector was dramatic in June,” said Philip Seng, USMEF president and CEO, in a Beef Board release.  “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.”

South Korean domestic beef prices also hit near-term highs in June, reflecting relatively tight supplies, the Beef Board said.

 

SENG LAMENTS LACK OF CHINA ACCESS

 

Lack of US beef access to China, which remains closed since the 2003 US case of Bovine Spongiform Encephalopathy, or Mad Cow disease, is a lamentable issue for US markets, Seng said.

China’s large and growing market, and its influence on global beef trade is growing rapidly, while the US is relegated to spectator status as countries like Australia expand their beef and cattle business with this market.

 

PORK EXPORTS ALSO SLIP

 

Pork and pork variety meat exports also slipped in May to 184,865 tonnes from 188,030 tonnes a year earlier.  These exports were valued at $489.2 million, compared with $599.6 million.

Year-to-date pork exports also are slipping.  The USDA said the US exported 910,967 tonnes through May, down 6% from the 964,631 exported in the year-ago period.

Those pork and pork variety meat exports were valued at $2.42 billion, down about 15% from $2.84 billion in the 2014 period.

 

CASH CATTLE MARKET QUIET

 

Cash fed cattle markets Tuesday were quiet with bids surfacing at $144 per cwt on a live basis in Kansas.  No bids were reported in Nebraska’s dressed market.  Asking prices were $150 live and $240 dressed.

The number of cattle offered for sale this week was thought to be lower overall, which could give sellers a little leverage in this week’s negotiations.

Cattle prices last week fell about $2 per cwt to mostly $148 on a live basis.  Cattle in dressed-basis markets sold for $234 to $236, down $2 to $4.  Trading was thought to be moderately active.

The USDA’s beef cutout value Tuesday was lower, with the choice product at $233.32 per cwt, down $0.51.  Select was reported at $230.01, off $0.21.

The CME Feeder Cattle Index for the seven days ended Monday was $217.62 per cwt, down $1.24.