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Vol. 11, No. 33 / February 15, 2013
There continues to be ongoing conversation among mar- YTD CHANGE IN US BEEF MUSCLE CUT EXPORTS BY COUNTRY
ket participants about the potential impact that an 8.2% cut on BASED ON WEEKLY BEEF EXPORTS FOR PERIOD Jan 3 - Feb 7, 2013 vs. Jan 5 - Feb 9, 2012
USDA’s budget could have on the ability of USDA to Total (metric Tons)
properly inspect processing plants. USDA officials have said Vietnam
+17% YTD
that under sequestration they will have no choice but to furlough Taiwan
food safety inspectors. With no inspector present, a plant would Russia
not be allowed to run. However, in a letter to USDA, AMI pointed Philippines
out that USDA “has a legal obligation to provide meat inspection Netherlands
Moldova
even under sequestration,” a position echoed by NCBA. Some are
Mexico
arguing that the potential for a disruption in the food inspection
Korean Republic
regime and closing of plants is pressuring livestock futures. With
Japan
plants closed, they will not be able to purchase livestock and poul- Hong Kong
try, effectively causing the prices to crash. Even if that were the Egypt
case, however, the impact would likely be temporary. If the flow Canada
of beef, pork and chicken is disrupted, it would also impact the Albania
price of meat the retail case, pushing prices higher. If anything, metric ton (4,000) (2,000) - 2,000 4,000 6,000 8,000 10,000 12,000 14,000
we think the situation could make for extremely volatile markets,
rather than have a sustainable negative price impact. At this YTD CHANGE IN FRESH/FROZEN US BEEF IMPORTS BY COUNTRY
BASED ON WEEKLY US CUSTOMS DATA FOR PERIOD Jan 3 - Feb 11, 2013 vs. Jan 5 - Feb 13, 2012
point, we continue to believe that current weakness in the market
reflects fundamentals, both higher than expected meat supplies Total Net vs. Yr. Ago
1,452 MT
and short term demand shocks due to weather and reduced con- Other Countries
+2.7%
sumer disposable incomes. The sequester may become an issue as
we approach the deadline but at this point we’ll let the politicians Uruguay
play their poker game. Somehow we all end up paying for their New Zealand
hand.
Mexico
The decline in wholesale beef prices has created opportu-
nities for world buyers and they appear to be taking advantage of Japan
the current sale on US beef. Through the first six weeks of Canada
the year, US shipments of fresh/frozen beef were 92,300 MT
up 13,167 MT (+17%) from the same period a year ago. One Australia
word of caution. Last year, weekly export data was quite volatile metric ton (6,000) (4,000) (2,000) - 2,000 4,000 6,000
for a few weeks. If we were to correct for the week to week volatil-
ity of last year, shipments likely are up about 6% from a year ago.
steady compared to last year although the expectation is for ship-
Still, this is a really good start to the year, especially considering
ments to increase following the relaxation of rules on cattle age.
that the growth has come despite lower exports to key markets
such as Japan and S. Korea. The chart above outlines the source So far, the growth in exports has outpaced the increase in
of growth in exports so far this year. Exports to Mexico have re- beef imports. But again, this is early in the year and this is nor-
bounded compared to very limited volumes last year, with total mal this time of year. Based on US Customs data, imports of
shipments so far this year up 4,878 MT or 31% from last year. fresh/frozen beef through February 11 were up about 1500 MT or
Exports to Canada through the first six weeks of the year were 2.7%. Imports from New Zealand and Mexico have shown the
also up some 4,237 MT, 44% higher than the same period last most growth, with import volume from these two countries up
year. One market that showed notable growth in the last quarter about 6,000 MT compared to year ago levels. However, much of
of Q4 and continued to perform well in January was Hong Kong. this increase has been offset by a sharp decline in beef imports
Beef exports to Hong Kong so far are up 4,074 MT or more than from Canada. In all, imports of grinding beef are up (more beef
double the volume of a year ago. Beef exports to Japan were from Australia/New Zealand) while imports of fed beef are track-
ing below year ago levels (less Canadian beef).
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