March beef export value was $693.1 million, up 18 percent year-over-year and topping the previous high set in October 2014. Export volume was 111,994 metric tons (mt), up 6 percent from a year ago. For the first quarter of 2018, exports were 9 percent ahead of last year’s pace in volume (318,073 mt) and jumped 19 percent in value ($1.92 billion).

Exports accounted for 13.6 percent of total beef production in March, up nearly a full percentage point from a year ago. For muscle cuts only, the percentage exported was 11.1 percent – up from 9.9 percent last year. For January through March, exports accounted for 13.2 percent of total production and 10.7 percent for muscle cuts, up from 12.4 percent and 9.8 percent, respectively.

Beef export value averaged $332.89 per head of fed slaughter in March, up 23 percent from a year ago. For the first quarter, per-head value averaged $315.67, up 18 percent.

Asian and Latin American markets drive big jump in beef export value

March beef exports to leading market Japan were steady with last year’s pace at 28,158 mt, while value increased 6 percent to $177.5 million. For the first quarter, exports to Japan were down 3 percent in volume (72,440 mt) but still increased 8 percent in value ($459.5 million). This included a 6 percent increase in chilled beef to 35,290 mt, valued at $275 million (up 18 percent).

March was the final month in which the higher safeguard tariff rate (50 percent versus the normal 38.5 percent) was applied to Japan’s imports of frozen U.S. beef. The higher rate took effect in August and expired on April 1 with the beginning of the new Japanese fiscal year.

"While beef exports to Japan held up well during those eight months, the higher tariff rate certainly weighed on exports of frozen cuts such as short plate," explained USMEF President and CEO Dan Halstrom. “U.S. short plate is an essential ingredient for Japan’s gyudon restaurants, which are part of a highly competitive fast-casual dining sector. We are pleased to have the higher safeguard tariff rate behind us, though U.S. beef still faces a widening tariff rate gap in Japan compared to Australian beef, and U.S. beef remains subject to Japan’s quarterly safeguard mechanisms for chilled and frozen imports. USMEF continues to monitor this situation, and we are hopeful that the frozen beef safeguard will not be triggered this year.”

Through an economic partnership agreement (EPA), Australian beef entering Japan is subject to tariff rates of 26.9 percent for frozen cuts and 29.3 percent for chilled, while the rate for beef from most other suppliers is 38.5 percent (Mexico’s EPA rate is 30.8 percent). Imports from EPA suppliers also are not subject to Japan’s quarterly safeguards. Australia’s tariff rates decline annually until they reach a floor of 19.5 percent for frozen and 23.5 percent for chilled, but will be phased down to 9 percent once the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is implemented. Japan’s beef imports from Canada, New Zealand, Mexico and Chile will receive the same benefits under CPTPP.

Conversely, U.S. beef enjoys a tariff rate advantage in South Korea under the Korea-U.S. Free Trade Agreement. This has helped push U.S. beef’s presence in Korea to new heights as U.S. beef drives Korea’s overall consumption growth and especially its soaring appetite for steaks. Through the first quarter, export volume to Korea was 22 percent ahead of last year’s pace at 51,909 mt, while value increased 37 percent to $366.3 million. Chilled beef exports to Korea accelerated at an even faster rate, increasing 34 percent from a year ago in volume (11,408 mt) and 44 percent in value ($107.9 million).

Other first-quarter highlights for U.S. beef exports include:

• Exports to Mexico were steady with last year in volume at 57,039 mt and climbed 10 percent in value to $250.3 million. Mexico is the leading volume destination for U.S. beef variety meat, including tripe, hearts, kidneys and livers. While first-quarter variety meat exports to Mexico declined 4 percent in volume (25,921 mt), they still achieved a 17 percent increase in value to $60.5 million.

• In Taiwan, exports increased 34 percent year-over-year in volume (13,067 mt) and 48 percent in value ($126.7 million). This included a 61 percent increase in chilled beef exports to 5,860 mt, valued at $74.4 million (up 72 percent). The U.S. holds 74 percent of Taiwan’s chilled beef market, the highest of any Asian destination.

• Exports to China/Hong Kong climbed 34 percent in volume (35,060 mt) and 61 percent in value ($269.1 million). Weekly data show that shipments to China cooled in April following China’s proposed tariff increase on a number of U.S. products, including beef. Although these tariffs have not been implemented, the threat of a possible increase has added uncertainty to the Chinese market, which reopened to U.S. beef in June 2017.

• Fueled by rapid growth in Indonesia, beef exports to the ASEAN region reached 11,157 mt (up 55 percent year-over-year) valued at $61 million (up 46 percent). Exports also increased to the Philippines and Vietnam.

• Strong performances in Chile and Colombia pushed beef exports to South America 42 percent higher in volume (7,006 mt) and 46 percent higher in value ($34.3 million). Exports to Peru trended lower in volume but still increased in value.

First-quarter demand was very strong in Guatemala, as beef exports increased 56 percent in volume (1,424 mt) and 45 percent in value ($8.4 million). Exports to the Central American region were up 15 percent in volume (3,145 mt) and 17 percent in value ($17.8 million).

• Beef muscle cuts continue to make inroads in Africa, where first-quarter exports were up 27 percent in volume (4,340 mt) and 88 percent in value ($6.7 million). While last year’s exports to Africa were almost entirely beef variety meat, muscle cuts now account for nearly 30 percent of export volume and 60 percent of export value.  

—From U.S. Meat Export Federation news release