U.S. pork and beef muscle cut exports performed well in March, concluding the first quarter of 2010 with increasing momentum, reports the U.S. Meat Export Federation. A sluggish global market for variety meat held down the overall totals, but muscle cut export value for both products are running ahead of their 2009 pace.

Pork muscle cut exports pulled ahead of their 2009 pace by 1 percent in volume, 785.5 million pounds and 2 percent in value. Combined pork/pork variety meat totals are slightly behind last year in both volume by 1 billion pounds and value by $1.11 billion.

On a positive note, the value of total pork exports in March edged up 1 percent compared to March 2009, and it was 18 percent ahead of the value of pork exports in March 2008, a record-setting year for U.S. pork exports.

Pork exports accounted for 22.5 percent of total production compared to 25 percent in March 2009, but muscle cut exports accounted for 19 percent of production, the same as one year ago. Per-head pork export value equated to $39.80 – which is down about $1 from March 2009.

Beef muscle cuts are off to a particularly strong start in 2010, increasing 22 percent in volume to 156,947 metric tons for the quarter. The increase in value was even higher, up 24 percent to $678 million. The combined beef/beef variety meat totals are also impressive, rising 11 percent in volume. Total beef exports accounted for 10.6 percent of overall production in March compared to 9.4 percent in March 2009.

The results for both pork and beef exports were achieved despite significant declines in each of their leading value markets. Beef exports to Mexico continue to struggle due to weakness in Mexico’s economy. Though beef muscle cut exports managed to pull within 7 percent in volume and 10 percent in value of their 2009 pace, variety meat exports to Mexico are still down dramatically.

Pork exports to Japan – which exceeded $1.5 billion in each of the last two calendar years – have slowed due to unusually high inventories of domestic pork. Muscle cut exports to Japan are within 13 percent in volume and 11 percent in value of last year’s pace.

Pork exports to Mexico continue to surge. In the first quarter, pork/pork variety meat exports to Mexico topped 100,000 metric tons (220.5 million pounds) valued at nearly $195 million. This was an increase of 24 percent in volume and 45 percent in value over last year.

“The growth we have achieved for U.S. pork in Mexico is just terrific,” said USMEF Chairman Jim Peterson, a rancher from Buffalo, Mont. “About this time last year, we were facing the A-H1N1 crisis and pork demand in Mexico looked like it might be in serious jeopardy. But we worked very hard to educate consumers and the trade there to keep the market open and maintain consumer confidence in our product. As a result, Mexico is now our leading volume market for U.S. pork. And now that prices are improving we’re seeing sustained buying at higher prices, which gives us impressive gains in export value.”

The growth of U.S. pork in Mexico has helped offset this year’s declines in four key markets – Japan, South Korea, Russia and China. The results in Japan and Korea are largely attributable to a spike in domestic pork production, while market access has been a major issue in both Russia and China.

Access to Russia is improving, with excellent progress being made in reinstating U.S. plants that were ineligible for export to Russia in late 2009 and early 2010. Most exports from these plants, however, are not reflected in the first quarter data. Despite an agreement between the United States and China for resumption of U.S. pork exports, no U.S. product has yet entered the country in 2010 as final details regarding import certificates are still being resolved.

In contrast to these markets, U.S. pork has posted impressive first-quarter gains in other regions. Highlights include:

Pork/pork variety meat exports to Canada are up 10 percent in volume and 19 percent in value.
Exports to Hong Kong reached  142 million pounds valued at $89.6 million. This is an increase of 52 percent in volume and 34 percent in value over last year.

“Across the globe, we are making strong gains for U.S. pork,” Peterson said. “When our shipments to Russia recover and we regain access to China, those markets will provide some important growth. We also expect Japan to work through its high inventories fairly soon, which will improve conditions for U.S. pork,” he said.

Source: USMEF