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USDA International Meat Review


11 June 2012

USDA International Meat Review - 7 June 2012USDA International Meat Review - 7 June 2012

The Food and Agriculture Organization (FAO) of the United Nations recently issued its bi-annual Food Outlook report. According to the FAO, world meat markets during 2012 are expected to see a recovery of supplies in major importing markets and strong competition. During 2012, world meat production is forecast to increase 1.6 percent over 2011 to 302.0 MMT.
USDA International Meat Review

Trade Highlights

The Food and Agriculture Organization (FAO) of the United Nations recently issued its bi-annual Food Outlook report. According to the FAO, world meat markets during 2012 are expected to see a recovery of supplies in major importing markets and strong competition. During 2012, world meat production is forecast to increase 1.6 percent over 2011 to 302.0 MMT. World beef production is predicted to total 67.5 MMT, which is unchanged from 2011. Increases are expected in Asia and Latin America and the Caribbean, while decreases are expected in North America and Europe. India is expected to see great expansion in beef production due to three new slaughter facilities that opened in 2011 for export product. In South Korea, government incentives to slaughter cows are expected to lead to an increase of 27 percent in beef production. In Canada, Australia and New Zealand, favorable pasture conditions are anticipated to increase carcass weights and beef production. Conversely, the drought situation in the U.S. has decreased cattle herds to the lowest levels in decades and is expected to lead to a decrease in U.S. beef production by 2.0 percent.

During 2012, world pork production is forecast to total 103.5 MMT, 1.8 percent more than 2011. Expansion is expected in China. Pork production may recover in Japan following a rebuilding of sow herds. Additionally, South Korea is expected to increase inventories significantly following outbreaks of FMD. Despite tight margins, a shift by consumers in North America from beef to lower priced meat products is expected to increase pork demand and lead to higher production. World sheep and goat meat production during 2012 is predicted to increase a little over 2011 to 13.6 MMT. In Australia and New Zealand, good pasture and favorable lambing conditions have reversed four years of declining production. Drought conditions in the U.S. have led to decreased sheep numbers. World meat trade during 2012 is forecast at 29.2 MMT, which is up 2.4 percent over 2011.

According to FAO, global meat markets are expected to face increased trade competition in 2012. At the same time, recovering meat production in Asian is expected to hamper growth in global import demand. World beef trade is expected to total 8.1 MMT, which is 4.0 percent higher than 2011, with much of the increase coming from the U.S. and the EU due to short domestic supplies. Exports from the U.S. are expected to decline. Decreasing production in Russia and a WTO-induced increase in the county’s tariff rate beef import quota are expected to reverse four years of declining imports. Japan’s beef imports are forecast to remain stable. FAO predicts that demand from China will be reduced by high international beef prices. Even though exports from Australia, New Zealand and Canada are expected to increase, most of the trade increase in 2012 is forecast to come from Brazil and India.

Argentina may export more beef, subject to government regulations. Exports from India are expected to increase nearly 20 percent. Meanwhile, Uruguay’s beef exports are forecast to decline for the third consecutive year due to drought reduced cattle inventories. During 2012, world pork trade is forecast at 7.0 MMT, slightly less than 2011 due to improved production in Asia. Imports are expected to decline in China, Japan and South Korea. According to FAO, declining trade prospects in 2012 set the stage for significant competition among the major exporters, including the U.S., the EU, Canada and Brazil, which together account for nearly 90 percent of the world trade. During 2012, world trade of sheep and goat meat is expected to increase 1.4 percent over 2011 to 700,000 MT as availabilities increase from Australia and New Zealand, which supply over 80 percent of the world trade. China is expected to increase sheep meat imports. Meanwhile, world per capita meat consumption during 2012 is forecast at 42.5 kilograms per year, which is up from 42.3 kilograms in 2011. Consumption growth is being restricted by near record high prices. Drought in the U.S., a major world meat exporter, and limited animal numbers in other exporting countries, have kept international prices at near record levels in the first quarter of 2012. The complete food outlook report can be found on the FAO website at http://www.fao.org/WAICENT/faoinfo/economic/giews/english/fo/index.htm.

Oceania

Recently, Australia’s Department of Agriculture, Fisheries and Forestry (DAFF) issued Australia’s red meat export numbers for May 2012. According to the data, Australia’s beef and veal exports during May rose 20.8 percent over the previous month to 86,886 MT. Also, this was up 2.6 percent over May 2011. Specifically, frozen beef exports equaled 64,475 MT, which accounted for 74.2 percent of the total. Fresh, chilled beef exports equaled 22,411 MT. Australia’s beef exports to Japan during May totaled 30,578 MT. This was 23.8 percent higher than April but was unchanged from May 2011. Total year-to-date beef exports to Japan equaled 120,553 MT, 11.1 percent less than last year.

Japan was Australia’s primary beef export market with 32.8 percent of the total. During May, Australia exported 19,724 MT of beef to the U.S., which was up 3.0 percent over the previous month and was up 30.3 percent over May 2011. Total year-to-date beef exports to the U.S. were 58.6 percent above a year ago, amounting to 100,778 MT. During May, beef exports to South Korea rose 21.1 percent over the previous month to 9,130 MT. However, this was down 20.0 percent from May 2011. Year-to-date beef exports to South Korea totaled 40,870 MT, 34.0 percent less than last year. Overall, Australia’s total year-todate beef and veal exports equaled 368,068 MT, which was 1.0 percent more than the same period a year ago.

During May, Australia’s lamb exports equaled 17,182 MT. This was up 20.8 percent over the previous month and was up 19.7 percent over May 2011. Also, this was the largest monthly volume since October 2007. Australia’s lamb exports to the Middle East during May rose 7.0 percent over April and 62.0 percent over May 2011 to 4,381 MT. Additionally, this was the highest single month volume since November 2010. Year-to-date lamb exports to the Middle East totaled 18,093 MT, 55.6 percent above a year ago. The Middle East was Australia’s primary lamb export market with 24.9 percent of the total exports. Lamb exports to the U.S. during May equaled 3,121 MT. This was 17.9 percent higher than the previous month but was 2.7 percent lower than May 2011.

Total year-todate lamb exports to the U.S. were down 1.1 percent from last year, amounting to 15,110 MT. During May, lamb exports to China reached a record 2,569 MT. This was up 22.3 percent over the previous month and was up 19.1 percent over May 2011. Year-todate lamb exports to China were 28.7 percent greater than a year ago, amounting to 11,023 MT. Overall, Australia’s total year-todate lamb exports equaled 72,591 MT, 19.1 percent above the same period a year ago. In the meantime, Australia’s mutton exports during May rose 16.8 percent over April and 44.4 percent over May 2011 to 7,717 MT. During May, Australia exported 4,571 MT of mutton to the Middle East, which was up 21.9 percent over the previous month and was up 41.5 percent over May 2011. Also, this was the highest single month total since February 2010. Year-to-date mutton exports to the Middle East totaled 18,742 MT, which was 13.5 percent greater than last year.

The Middle East was Australia’s main mutton export market with 49.4 percent of the total. Australia’s mutton exports to China during May totaled 503 MT. This was 34.9 percent higher than the previous month and was 154.0 percent higher than May 2011. Total year-to-date mutton exports to China were 72.3 percent higher than a year ago, amounting to 2,848 MT. During May, Australia exported 102 MT of mutton to the U.S. Although this was 51.0 percent lower than the previous month, it was 39.7 percent higher than May 2011. Year-to-date mutton exports to the U.S. totaled 1,848 MT, 7.9 percent less than last year. Overall, Australia’s total year-to-date mutton exports equaled 37,950 MT, 16.4 percent greater than the corresponding period a year ago. To obtain further information on Australia’s red meat exports, go to the DAFF website at http://www.daff.gov.au/.

North America

On May 31, the USDA Economic Research Service (ERS) and the USDA Foreign Agricultural Service (FAS) released the quarterly Outlook for U.S. Agricultural Trade. According to the report, during the fiscal year (FY) 2012, U.S. exports of agricultural products are estimated to value $134.5 billion. This is up from the prior forecast of $131.0 billion but is down 2.1 percent from 2011. This is the second highest on record. Exports of livestock products during 2012 are expected to total $18.9 billion, down from the previous forecast of $19.0 billion. Beef and veal exports during 2012 are forecast at 900,000 MT, unchanged from the prior estimate. The value of beef and veal exports is predicted to total $4.9 billion, unchanged from the previous forecast.

During 2012, U.S. pork exports are estimated at 1.8 MMT, unchanged from the February estimate. The value of pork exports is forecast at $5.6 billion, up from the prior forecast of $5.5 billion, as large volumes more than offset a slight decline in unit values. Growing pork exports to East Asia and North America are supported by a relatively weak dollar and competitive prices. Beef and pork variety meat exports during 2012 are expected to total 800,000 MT, lower than the prior estimate of 900,000 MT. The value of variety meat exports is forecast to increase to $1.4 billion due to strong prices. In the meantime, during FY 2012, U.S. agricultural imports are estimated to value $107.5 billion, which is up from the previous forecast of $106.5 billion. Also, this is up nearly 1.0 percent over 2011.

During 2012, the value of livestock and meat imports is forecast at $9.7 billion, up from the prior estimate of $9.4 billion. Imports of cattle and calves during 2012 are predicted to total 1.9 million head, down from the previous estimate of 2.0 million head. The value of those imports is pegged at $1.5 billion, down from the estimate of $1.6 billion in February. Imports of live hogs are expected to total 5.8 million head, unchanged from the previous forecast. The value of live hog imports during 2012 is forecast at $400 million, also unchanged from the earlier forecast. Beef and veal imports are estimated to total 800,000 MT, up from the prior estimate of 700,000 MT due to tighter domestic supplies and good supplies in Canada, New Zealand, Australia and Mexico. The value is estimated at $3.8 billion, up from the previous forecast of $3.3 billion. During 2012, pork imports are forecast at 300,000 MT, unchanged from the prior estimate. The value is forecast at $1.2 billion, which is down from the February forecast of $1.3 billion. The entire report, which includes a world economic outlook and regional information, is available on the ERS website at http://www.ers.usda.gov/.

Recently, the U.S. Customs and Border Protection (CBP), a division of the Department of Homeland Security, released the most current data on U.S. beef imports under a tariff rate quota (TRQ). According to the numbers, as of June 4, 2012, U.S. beef imports subject to a TRQ equaled 301,751 MT, which was 22.7 percent more than the same period a year ago. Imports of beef from Canada, which do not fall under a TRQ, totaled 88,484 MT. This was 1.3 percent lower than a year ago.

Beef imports from Australia were 77.3 percent greater than last year, amounting to 85,807 MT due to improved pasture conditions, increased carcass weights and production. This filled 22.7 percent of Australia’s TRQ, compared to 12.8 percent a year ago. Imports of beef from New Zealand equaled 69,633 MT. This was little changed from a year ago and filled 32.6 percent of the TRQ, the same as last year. Beef imports from Uruguay through June 4 were 58.3 percent higher than a year ago, totaling 6,895 MT. This filled 34.5 percent of the country’s TRQ, up from 21.8 percent last year. Imports of beef from Argentina continue to be banned due to foot-and-mouth disease (FMD). The weekly report is available on the CBP website at http://www.cbp.gov/xp/cgov/trade/trade_programs/textiles_and_quotas/commodity/.

June 2012

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