West Coast dispute concerns meat industry, but 2014 exports still look good

Labor wrangling at West Coast ports creates concerns for U.S. meat exporters, though value and volume looks good for pork and beef in 2014

Export value for both U.S. beef and pork reached new heights in 2014 despite labor disputes at West Coast ports, posting double-digit gains over the previous year's totals, according to statistics released by USDA and compiled by the U.S. Meat Export Federation.

Related: West Coast port labor issues enter mediation, meat exports slow

Beef export value was $7.13 billion – an increase of 16% (and nearly $1 billion) over the previous record set in 2013. Export volume was just under 1.2 million metric tons – which was short of the 2011 record, but up 2% year-over-year.

Pork export value totaled $6.67 billion, an increase of 10% year-over-year, breaking the 2012 record by 6%. Pork export volume increased 2% to 2.18 million mt. The volume record is 2.62 million mt, set in 2012.

USMEF said exports overcame significant challenges to reach recorded value and volume, including market access restrictions in Russia and China, an appreciating U.S. dollar and, most recently, shipping difficulties related to a labor dispute in the West Coast ports.

In December, beef export volume slipped 2% year-over-year to 100,270 mt, though value still increased 17% to $643.2 million. December pork export volume was down 5% to 183,498 mt, but value still achieved a slight increase to $541.3 million.

"2014 was an outstanding year for red meat exports, but headwinds continued to mount late in the year," said USMEF President and CEO Philip Seng. "The West Coast port congestion is extremely troubling, because the delays faced by exporters in December have become even more severe in 2015. If this dispute is not resolved soon, the meat industry will have to win back long-term customers who still want our product, but have no choice but to seek alternative suppliers."

The situation is especially critical, USMEF said, because Asian markets take a large volume of chilled U.S. beef and pork, valued at more than $2 billion in 2014.

Customers paid record prices for U.S. beef and pork while still purchasing larger volumes in 2014. This is especially noteworthy because U.S. pork prices were higher than EU prices for most of the year, and U.S. cattle prices were significantly higher than prices in Australia and all other major beef-exporting countries, USMEF said.

Related: West Coast port slowdown costing U.S. agriculture millions

Exports continue to generate strong returns for producers, as beef export value per head of fed slaughter averaged a record $297.68 in 2014, up $52.72 from the previous year. December export value was $340.69 per head, up $61.53 from a year ago. Pork export value per head slaughtered also set a record of $62.45 in 2014 (up $8.50 from a year ago), despite slipping slightly in December ($54.94, down $0.33).

"These exceptional results illustrate the strength of the international markets," Seng said. "In the past five years, per-head export value has more than doubled for beef producers and has increased more than 60% for pork."

Beef exports in 2014 equated to 14% of total production (muscle cuts plus variety meat) and 11% of muscle cuts alone, up from 13% and 10%, respectively, a year ago. Pork exports equated to 26.5% of total pork production and 22% of muscle cuts alone, up slightly from 2013.

Beef export details

In 2014, exports to Japan increased 3% in volume (241,129 mt) and 14% in value ($1.58 billion). Value eclipsed the pre-BSE mark for the first time, though volume was still below the 2003 total.

Hong Kong set new annual records as export volume increased 19% to 154,520 mt and value surged 40% to $1.15 billion, while exports to South Korea set a new annual value record of $847.4 million, up 39%. Volume increased 12% to 117,567 mt.

Related: Fast-filling Import Quota Could Slow U.S. Beef Exports to EU

Taiwan also set a new annual value record of $293.6 million (up 15%), while volume increased 5% to 33,804 mt.

In Mexico, exports increased 12% in volume to 242,566 mt and 26% in value to $1.17 billion. As USMEF has previously noted, however, issues with the 2013 data suggest these year-over-year increases may be overstated.

Pork export details
Russia's ban on EU pork – which has now lasted more than a full year – and its August suspension of pork imports from the U.S. and Canada had a significant impact on the global pork market in 2014, USMEF said.

Despite these issues, U.S. pork exports held relatively strong, buoyed by leading volume market Mexico. Exports to Mexico set volume and value records for the third consecutive year, reaching 680,843 mt (up 9%) valued at $1.56 billion (up 27%).

Additionally, exports to South Korea soared 36% in volume to 135,396 mt and 61% in value to $444.6 million, while exports have doubled to Columbia since 2012. These exports set new volume and value records in five consecutive years. In 2014, exports increased 39% in volume to 47,441 mt and 52% in value to $134.11 million.

Although pork exports to Canada were lower in volume (207,362 mt, - 9%), export value set a new record of $904.7 million (up 7%).

Source: USMEF

TAGS: Regulatory
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