Amid trade conflict, beef exports down 4.2% this year

October marked another sluggish month for beef exports that fell 9% from the year-ago period. The decline contributed to a year-over-year decrease of 4.2% for the first ten months of 2019, according to Derrell Peel, livestock marketing specialist with Oklahoma State University Extension.

Peel said the lackluster beef exports are linked to trade issues with Japan, the largest customer for U.S. beef.

Beef exports to Japan were down 23.5% in October and are down 10.6% year-over-year in 2019.

“The U.S. has been at a significant tariff disadvantage in Japan after withdrawing from the TPP agreement,” Peel said. “The impacts of the CP-TPP, which took effect this year without the U.S. have become increasingly apparent in recent months as beef exports to Japan have decreased year over year for the last eight months.

“The bilateral trade deal between the U.S. and Japan, recently ratified in Japan, is scheduled to begin in 2020 and will hopefully, erase most of the tariff disadvantage the U.S. currently faces and will stop the erosion of beef market share in Japan.”

Japan represents 26.7% of U.S. beef exports in 2019, according to the U.S. Meat Export Federation.

Peel said this year’s sluggish beef exports follow three years of double-digit annual growth from 2016 to 2018. He said beef exports are down this year in four of the top five U.S. beef export markets.

He said South Korea has bucked that trend. As the second-biggest customer for U.S. beef, exports to South Korea are up 7.4% this year, despite a 1.2% dip in October. South Korea accounts for 22.8% of total U.S. beef exports thus far in 2019.

Mexico is the third-largest beef export market. Beef exports to Mexico were down 11.5% in October and are down 3.5% for the year to date. Mexico accounts for 14.3% of beef exports thus far in 2019.

Canada is the fourth-largest U.S. beef export market. Beef exports to Canada were down 4.5% in October compared to last year and are down 11.3% thus far in 2019. Canada represents 8.8% of beef exports thus far in 2019.

Hong Kong is the fifth-largest beef export market, down 11.1% year-over-year in October and down 27.5% thus far in 2019, Peel noted. Hong Kong represents 6.9% of total beef exports in 2019. Close behind Hong Kong is Taiwan, where beef exports were down 8.7% in October but up 7.8%  for the year to date. Taiwan is the sixth-largest beef export market for U.S. beef and accounts for 6.5% percent of the year to date exports.

Beef exports to the top six markets represent 86.1% of total beef exports through October in 2019, Peel noted.

While U.S. beef exports are down this year, imports are holding steady. Peel said total beef imports increased 2.7% in October, and are up 0.7% for the year.

Beef imports from Canada were up 8.9% in October and are up 8% year-over-year for the first ten months of the year. Canada is the largest beef import market with 27.7% of the market this year.

Australia is the second-largest beef import source for the U.S. with imports down 7.1% in October and up 4.1% for the year to date. Australia accounts for 23.1% to beef imports thus far in 2019.

Mexico is the third-largest importer of U.S. beef. In October, beef imports from Mexico were up 19.6% from a year ago, while rising 14.1% for the first 10 months of the year. Mexico accounts for 18.7% of U.S. beef imports so far this year.

New Zealand is the fourth-largest beef import market for the U.S. with October imports down 37.9% and year to date imports down 28.8%. New Zealand represents 14.5% of the total beef imports.

Peel said the top four beef import sources account for 84% of total imports with Nicaragua adding another 5.5% and Brazil adding 5.2%.