Status of U.S. Meat Product Exports in 1998

Status of U.S. Meat Product Exports in 1998

Expectations of lower U.S. meat exports due to the Asian financial crisis have not been realized in 1998 with shipments through August up 11 percent over last year. The overall value of meat and related products, however, is down 3 percent to-date due to lower per unit values. Abundant U.S. meat supplies in 1998, low domestic prices, combined with selective importer buying of cheaper meat cuts, have dampened overall meat export values.

The strong pace of U.S. red meat and poultry exports is likely to slow over the remainder of the year as U.S. meat exporters deal with the effect of the devaluation of the Russian ruble. This combined with anticipated slower demand from Japan-the U.S.'s leading export market for meat products-is leading to 1998 meat exports projected at 4 million tons, only marginally above 1997.

The market highlights of 1998 to-date include:

Through the first 8 months of 1998, U.S. red meat and poultry meat exports were more than 2.9 million tons, 11 percent higher than a year ago. Pork and broiler exports have experienced strong gains, while beef has advanced more slowly.

U.S. beef and veal exports in 1998 have risen 4 percent to 464,457 tons, valued at more than $1.5 billion. Despite the gains in volume shipped, the value of overall exports has actually dropped in 1998 with the average export value in 1998 about $3,341 per ton, 8 percent below 1997. Beef exports to Japan, the U.S.'s major market, reached 254,000 tons, 12 percent over last year's level.

Lower pork export prices, down 34 percent or $387/ton from last year, prompted a 32 percent jump in pork exports to 271,000 tons through August. Shipments to Japan-the leading U.S. market-have stayed 8 percent ahead of 1997 at 116,746 tons. Demand for U.S. product from Russia took off in 1998, with exports through August reaching nearly 40,000 tons, an amazing 122 percent higher than last year's levels. Exports to that market are expected to drop sharply during the remainder of the year due to the ruble devaluation.
Product movement south of the border to Mexico continues strong with pork exports to Mexico surging 82 percent through August while beef exports have posted a 40 percent jump. Mexico is the U.S.'s third largest meat export market, behind Japan and Russia.
Strong demand for lower priced beef cuts and pork in Japan has kept U.S. red meat exports from declining in Asia. The 11-percent gain in Japanese imports of U.S. beef and pork through August has offset much of the sharp decline in Korea, where financial uncertainty has led to a 50-percent decline in red meat imports from the United States.
U.S. poultry exports which began 1998 with a bang may end with a whimper as trade with Russia, the U.S.'s largest export market, grinds to a halt. Overall, poultry meat exports through August, 1.8 million tons, came in at a healthy 9 percent increase over 1997. However, a fall off in trade over the last four months of 1998, due to constrained demand from Russia, is expected to limit overall exports in 1998 to 2.5 million tons, 2 percent lower than the 1997's record.
U.S. exports of variety meats were up 14 percent through August as low prices prompted increased imports by the U.S.'s three major markets-Japan, Mexico and Russia.
After dropping by over 15 percent in 1997, U.S. exports of tallow and grease rebounded by over 35 percent in the first eight months of 1998. This recovery came as exports gained strength in Central and South American markets. Exports to the European Union continue to slip as regulatory uncertainty over the BSE crisis hampers trade. Higher palm stearin prices have helped regain the Asian market. Exports to Mexico continue to grow, reinforcing this market as the number one destination for U.S. tallow and grease.
The Korean and Japanese financial crisis has hit U.S. hide exporters hard, plunging export revenues by almost 25 percent during the first eight months of 1998 to less than $700 million. Because Korean imports of whole hides account for well over one-third of the U.S. total, the sudden drop in hide demand in Korea depressed prices from approximately $80/cwt at the end of last year, to around $55/cwt at mid-October. Other countries, however, have taken advantage of these lower prices and U.S. total exports through August dropped by only 7 percent to about 12 million pieces-avoiding even greater losses..

OUTLOOK FOR 1999:

Total red meat and poultry exports in 1999 are projected to decline nearly 2 percent to 3.97 million tons. While shipments of red meat are forecast up marginally in 1997, uncertain prospects for a recovery in the Russia economy are prompting a projected decline in U.S. poultry meat exports to 2.4 million tons. Next year should be better for hide exporters since lower world slaughter and improved Asian demand should push up hide prices to more profitable levels
As the Asian economic contagion spreads around the globe, economic uncertainties are clouding the outlook for meat exports in 1999. Slow economic growth in Japan and Korea-two large markets for U.S. red meat- hold the potential to constrain demand for red meats. The recent notification by the Mexicans that they plan to initiate an anti-dumping investigation against U.S. beef, beef offal, cattle and hogs poses concern about the outlook for animal and meat trade to that growing market.

Value of U.S. Meat and Product Exports, 1990-1998
Exports ($1,000)	1990	1996	1997	1997	1998	% change
				Jan.-Aug.	Jan.-Aug.	from 1997
Beef	$1,580	$2,429	$2,497	$1,629	$1,552	-5%
Pork	$327	$1,019	$1,046	$685	$716	5%
Poultry Meat	$673	$2,483	$2,423	$1,581	$1,575	0%
Variety Meats	$361	$714	$595	$390	$399	2%
Red Meat & Poultry	$2,941	$6,645	$6,561	$4,285	$4,241	-1%
Hides and Skins	$1,459	$1,245	$1,256	$896	$679	-24%
Tallow and Grease	$366	$507	$450	$288	$374	30%
TOTAL MEAT/PRODUCTS	$4,765	$8,397	$8,267	$5,469	$5,295	-1%

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Last modified: Thursday, April 06, 2000