1. Vol. 10, No. 197 / October 11, 2012
COMBINED BEEF, PORK, BROILER AND TURKEY TRADE BALANCE
Market Comments EXPORTS MINUS IMPORTS, MILLION POUNDS, USDA + STEINER ESTIMATES
14,000 12,875
12,714
Forecast
Concerns about the state of the global economy con- 12,000
tinue to weigh upon market sentiment, and for good reason.
Today, the US meat industry depends on trade with the rest of the 10,000
world more than at any other time in history. Often we hear about 8,000
the impact that increased imports have on domestic producers, in-
MILLION POUNDS
variably followed by calls for the government to do more to limit 6,000
such imports. The truth is that the US is a significant beneficiary 4,000
of trade with the rest of the world. In 2011, exports of beef, pork,
broilers and turkey accounted for about 17% of the overall volume 2,000
of red meat and poultry production in the United States. The ex- 0
pectation is for exports to be even higher in 2012 and in 2013. In
2011, the US was a large net meat exporter, shipping about 15.7 -2,000
billion pounds of beef, pork and poultry while importing only about
-4,000
3.5 billion pounds of product, a good portion of it in the form of lean
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frozen boneless beef. Imports of lean beef used to get a lot of nega-
tive press in the past but even there the situation has dramatically
Top Markets for US Beef, Pork and Poultry (combined)
changed. It is now in the interest of US cattle producers for the US
to import more not less beef. Consider that much of the beef that Canada, 9%
comes into the US does not compete directly with the steaks, round
cuts and chuck that sells at the grocery store. Rather, it is a criti-
cal component in making ground beef, largely for the foodservice Other, 38%
industry. Without this supply of lean beef, it would be much more
Mexico, 19%
difficult to find enough supply to mix up with the fat trim that re-
sults from breaking down beef primals. At this time, there is a
significant oversupply of fat beef trim in the US and there is a 15.7 bil. lbs
shortage of lean cow meat (smallest cow herd in 50 years). Lack of 17% of US
lean beef supplies tends to depress the market for fat beef trim and Meat Prod.
lower the overall value of the cattle coming to market. As for other
proteins, there is very little debate as to the benefits of trade. In
2011, the US exported some 5.1 billion pounds of pork while im- Japan, 12%
porting just a little over 800 million pounds while chicken exports
totaled almost 7 billion pounds and imports were just 100 million
Russia, 5%
pounds or so. China + HK,
South Korea,
7%
The significant positive net trade in meat protein 11%
makes US producers more vulnerable to shifts in global eco-
of the Free Trade Agreements negotiated in the 1990s. Japan,
nomic conditions as well as shifts in exchange rates. Part of
China and S. Korea are also very important markets. So when
the reason for the sharp rise in US meat protein exports is the de-
you see news of slowing growth in China, stagnant growth in
cline in the value of the US dollar. This has made US meat protein
Japan and S. Korea, keep in mind that these are not just curious
much more competitive in global markets and offset the higher pro-
stories from lands far away, they directly impact some of our ma-
duction costs compared to other large global suppliers such as Bra-
jor customers and affect the price of livestock and poultry traded
zil, the EU, Australia and Canada. More than 60% of US meat
every day. And when world growth forecasts are pared back, it
exports currently go to six major markets (see chart). Mexico and
could mean your profit potential may be pared back as well.
Canada account for about 28% of US meat exports, a result in part
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