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CME: US Beef Exports from Jan-March Down Compared to 2018

25 April 2019

US - The regular weekly update on US beef and pork exports was published this morning and below we offer a brief recap, writes Steiner Consulting Group, DLR Division, Inc.

But before we get to that a few points are in order. On Tuesday we participated in a meeting in Chicago with representatives of various USDA agencies. The meeting is an annual event organised by USDA as "an opportunity to update data users on recent and pending changes in the various statistical and information programmes important to agriculture, and to seek comments and input on these programmes."

One of the questions that we asked to USDA representatives had to do with the kind of pork products that exporters are expected to report to USDA in their weekly updates. As many of you know, the report only covers fresh, chilled or frozen muscle cuts of beef. This is an important distinction since the report does not include sales of pork trimmings, it does not include variety meats and it may not include sales of hog carcasses.

We say may since it is unclear whether a carcass that has been split in six or three pieces is considered reportable. Our opinion is that it should be reported since a carcass split in such a way would basically be primals and classified using the same HS codes as those for various muscle cuts. The only complication would be if when splitting the carcass the packer leaves the feet attached. Since pig feet are considered variety meat then it might not be possible to use the same HS code as for muscle cuts.

We welcome any feedback on this and we also urged USDA to review this issue and provide an update to trade on their website. Participants are paying close attention to this report in order to gauge export demand from China. But if product going there is not reportable, then it would be good for trade to be aware of that. Below is a brief recap of this latest update.

Beef highlights: US beef exports in the first three months of the year have been down compared to a year ago and recent data suggests that exports will be lower in April as well. In the four weeks ending 18 April US beef exports have been seven percent lower than a year ago.

Exports to Mexico during the last four weeks were 20 percent lower than last year and exports to Canada were down 38 percent. Hong Kong has some very big export commitments on the books but actual shipments remain quite low, down 28 percent compared to a year ago. The only positive in this latest update is the improvement in sales to Japan and South Korea.

In the last two weeks export sales to Japan have averaged over 8000 MT compared to a weekly export pace of around 4500-5000 MT. Export sales to South Korea in the last four weeks have averaged 19 percent above year ago and outstanding sales to South Korea are now above year ago levels.

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