By Josh Maples
U.S. beef trade continues to adjust to supply and demand shocks. The latest data release from the USDA Economic Research Service (ERS) shows the impact of these shocks on U.S beef exports and imports. On August 6, ERS released the June 2020 Livestock and Meat International Trade data
. The data show beef exports were lower in June while imports were higher.
According to the ERS data, U.S. beef exports on a carcass weight basis were 183.3 million pounds in June 2020 which was 33 percent lower than in June 2019 and the lowest June total since 2009. This follows a similarly low May 2020 which was 31 percent below May 2019. On the import side, U.S. beef imports were up 15 percent in June 2020 over the previous June and the highest total since June total since 2015.
Beef exports started 2020 strong. First quarter exports were 10 percent above the same period of 2019. The second quarter is when beef exports experienced declines – down 23 percent from the second quarter of 2019. For the year-to-date in available ERS data, U.S. beef exports are down 7.6 percent compared to same period in 2019 and beef imports are 3 percent above 2019.
Japan, South Korea, Canada, and Mexico are the top four export destinations and together accounted for 75 percent of beef exports in the first half of 2020. Exports were lower to each of these countries during June 2020 with the exception of Canada which was essentially unchanged as compared to June 2019. Exports to Mexico were down 61 percent in June compared to June 2019. Worth noting, beef exports to China were up 90 percent from June 2019 but accounted for only 2.8 percent of total June 2020 exports.
Canada, Mexico, Australia, and New Zealand are the top four import sources and together accounted for 83 percent of beef imports in the first half of 2020. During June 2020, imports from Mexico were up 58 percent over June 2019, imports from Canada were up 4.2 percent, and imports from Australia and New Zealand were down 9 and 5 percent, respectively.
These data are likely not surprising given the U.S. beef supply disruptions in April through June. Lower production and reduced product availability certainly impacted international trade. However, the demand side is equally important and has impacted imports and exports. Weaker macroeconomic settings in many countries combined with higher U.S. beef prices also played a part in the trade adjustments. Additionally, exchange rate changes play a key role. Beef production and prices were much more normal in July (relative to April-June) and it will be interesting to watch how quickly trade adjusts to these changes moving forward.Source : osu.edu