Home / Markets / Markets Analysis / Beef market / USDA report confirms lower meat exports

USDA report confirms lower meat exports

Agriculture.com Staff 07/17/2009 @ 11:52am

Last Friday's monthly Supply and Demand report was closely watched for changes in the corn and soybean markets, but the real change was a confirmation of slow export business for US meats.

Specifically, pork exports were down 34% from a year ago. A lingering global recession, along with the outbreak of the H1N1 flu virus, saw many countries backing away from importing US meats. This was also reflected in a major drop-off in US prices. July hog futures during the month were initially trading in the $68 to $70 range, only to slide lower, entering June trading $10 per CWT lower.

The term "demand destruction" has been bantered about over the last twelve months. Originally, this term came about due to the high grain prices and ideas that end users would be unable to pay this price for grain, thus creating herd liquidation and lower demand for grains. However, the demand destruction in the pork industry has been significant. The H1N1 outbreak gripped the world; thus, bans against US pork products led to a sharp decline in exports. As an example, pork exports to China and Hong Kong were more than 80% lower than the previous year. In part, some of this may have come from lower post-Olympic buying. Nonetheless, a larger-than-expected decline occurred. Exports to Mexico during May were more than 50% lower than April and nearly 6% lower than a year ago. Shipments to Japan were down over 10% from April and nearly 16% from a year ago.

Now the obvious question is, how long will it take until exports pick up? Unfortunately, in the foreseeable future of the next two to three months, it looks as though the export market will continuously be underperforming 2008 levels. The double whammy of H1N1, along with recessionary concerns and a US Dollar trading higher than a year ago, all continue to exert pressure. Our belief is that it will take time, but these variables will pass. The export market will recover some of its lost ground, eventually creating a positive trend. Look for a brighter 2010.

If you have questions or comments, contact Top Farmer at 1-800-TOP-FARM ext. 129 and ask for Bryan Doherty.

Last Friday's monthly Supply and Demand report was closely watched for changes in the corn and soybean markets, but the real change was a confirmation of slow export business for US meats.

CancelPost Comment
MORE FROM AGRICULTURE.COM STAFF more +

Farm and ranch risk management resources By: 07/07/2010 @ 9:10am Government resources USDA Risk Management Agency Download free insurance program and…

Major types of crop insurance policies By: 07/07/2010 @ 9:10am Crop insurance for major field crops comes in two types: yield-based coverage that pays an…

Marketing 101 - Are options the right tool… By: 07/07/2010 @ 9:10am "If you are looking for a low risk way to protect yourself against prices moving either higher or…

MEDIA CENTERmore +
This container should display a .swf file. If not, you may need to upgrade your Flash player.
Are We In a Climate Change?