CHICAGO: Beef became the most valuable U.S. meat export for the first time in a decade in 2013, with the $6 billion in trade receipts up more than 12 percent from the year before and greater than those for pork and poultry.
Actual shipped quantities of beef were only 3.6 percent higher on the year, so the chief driver of the rise in receipts was higher overall beef prices, which hit record highs on the back of tight cattle supplies and pricey feed costs.
Still, the fact that sales tonnage increased despite higher beef values bodes well for the cattle industry. Shipments in 2014 are already running at the fastest pace since 2003, with the traditional peak period in beef shipments still ahead.
LONG RECOVERY
Beef's resurgence as the top-valued meat export from the United States was a long time coming, and marks the near total recovery in overseas demand for American beef from the precipitous dropoff in shipments seen in 2004 following the outbreak of mad cow disease at the end of 2003.
Nearly all the top markets for U.S. beef have regained their appetite for American steaks following the mad cow fallout, with shipments to Japan, Canada and South Korea all returning to pre-outbreak levels in recent years. Demand from Mexico, which was the largest market for U.S. beef during the lean years in the immediate wake of the mad cow scare, has also remained firm, while a 350 percent climb in demand from China between 2003 and 2013 has also fostered the recovery in the pace of U.S. beef shipments.
Nonetheless, overall beef exports have proved to be relatively constrained over the past decade or so compared with those of poultry and pork, with beef shipments in 2013 actually down 8.4 percent from 2000 levels. That compares with a nearly 270 percent climb in pork shipments and a 48.5 percent jump in poultry exports over the same period.
Greater export competition from other producers such as Brazil and Australia as well as the slow pace of import policy changes in certain end-user markets in the post mad cow era, have contributed to the sluggish growth rate in beef exports.
But with another possible outbreak of mad cow disease in Brazil following an "atypical" case of the disease in the Brazilian state of Parana in 2012, Brazil's exports may struggle to grow over the near to medium term, paving the way for a potential continued recovery in U.S. shipments.
And the peak period for U.S. beef shipments still lies ahead. In each of the past four years U.S. beef exports have tended to increase in volume over the March to July period as overseas importers move to capitalize on a seasonal cheapening in domestic cattle prices.
This period coincides with a typical softening in the export pace of pork, which may well be accentuated this year due to the historic strength in U.S. pork values, and so should serve to solidify beef's position as the highest-value American meat export going into the middle of the year.
Poultry may be beef's biggest competitor for the top spot in export values as global poultry demand continues to expand annually and the U.S. Department of Agriculture has penciled in record-high U.S. broiler exports this year.
But following a recent outbreak of bird flu in California, which has already resulted in a suspension of poultry shipments from that state, actual U.S. poultry shipments may face stiffer headwinds than normal over the coming months.
This should leave beef exporters in prime position to complete their renaissance as the top players in the U.S. meat export arena, and build on the strong revenue earnings of 2013 over the rest of 2014.
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