1. Vol. 10, No. 175 / September 11, 2012
Market Comments YTD CHANGE IN US BEEF MUSCLE CUT EXPORTS BY COUNTRY
BASED ON WEEKLY BEEF EXPORTS FOR PERIOD Jan 2 - Aug 30, 2012 vs. Jan 3 - Sep 1, 2011
Total (metric Tons) +4% YTD
US beef exports have been tracking close to year ago lev-
Vietnam
els for much of the summer even as shipments to top markets
Taiwan
such as Mexico Canada and S. Korea have been lower than Russia
a year ago. Based on US weekly beef export data, shipments to Philippines
Mexico for the period May - August were down 10% from the same Netherlands
period a year ago while shipments to Canada during the same Moldova
reference period were down 11%. Canada and Mexico remain two Mexico
of the top markets for US beef although they represent a much Korean Republic
smaller share of total exports than what they once did (see chart). Japan
Indeed, in the last two months Japan has overtaken Mexico in Hong Kong
terms of weekly volume. And based on recent media reports, Ja- Egypt
pan will likely emerge as a much more prominent market for US Canada
beef in 2013. According to the Yomiuri Shimbun newspaper , “an Albania
expert panel of the (Japanese) Cabinet Office's Food Safety Com- metric ton (20,000) (15,000) (10,000) (5,000) - 5,000 10,000 15,000 20,000 25,000 30,000
mission has decided to relax restrictions on U.S. beef imports.“ It
is expected that Japan will no longer require that beef exports to
Japan come only from cattle 20 month or younger. Rather the age SHARE OF US WEEKLY BEEF EXPORTS BY MAJOR MARKET
limit of cattle eligible for export will likely be increased to 30 100%
months or younger, consistent with such requirements from other 90%
markets. It is unclear as to when the expert panel’s recommenda-
tion will come into effect as it appears to be part of a larger nego- 80%
Other
tiation as Japan seeks to join negotiations over the Trans-Pacific 70%
Partnership Free Trade Agreement.
60% Canada
Should Japan relax its rules over the age of cattle eligible
for exports, it will provide an immediate boost to the amount of 50%
US beef going to this market. While higher beef prices and a 40%
Mexico
strong US dollar remain a concern, the expectation is that Japa-
30%
nese end users will quickly gravitate to US beef offerings at the S. Korea
expense of some of their current suppliers. The US shipped about 20%
138,915 MT of beef (shipped weight) to Japan in 2011. This com-
10%
pares to about 298,034 MT of beef shipped to this market in 2003. BSE
Japan
Some of the volume lost in the last 10 years will not be recovered 0%
as other suppliers have been able to establish relationships and 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
service Japanese needs. However, we would expect US beef ship-
ments to increase by 50,000 - 75,000 MT if Japan relaxes its rules kets now account for the largest share of US beef shipments.
for US beef. Such an increase could boost total US beef exports in This is a sign of strength, as the US beef industry has become
2013 (assuming 2012 volume at 875,000 MT) by as much as 8.5%. much more diversified. The increase in export demand, be this
However, keep in mind that as US beef prices continue to climb, it from Japan, Taiwan or even Mexico (they now also have a
will be difficult to sustain export volumes to a number of smaller smaller herd), combined with a smaller US beef production vol-
markets. Russia, Vietnam, the Philippines and especially Egypt, ume will continue to pressure prices higher in the US market in
all have contributed to offset the reductions in exports to Mexico, 2013 and beyond.
Korea and Canada. Indeed, US beef exports to these smaller mar-
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