Page 9 - AMIE Newsletter August 2024

The U.S. is the largest global exporter of beef variety meat (bvm) and accounts for close to a fifth of global export volume. Through the first half of 2024, U.S. beef variety meat exports totalled 141,707 mt, down 1% from last year, valued at $562.6 million, up 2%. Exports were higher than last year to Mexico (59,607 mt, +13%), Egypt (20,165 mt, +25%), Canada (4,304 mt, +10%), Peru (2,785 mt, +10%), Chile (1,630 mt, +42%), Gabon (1,391 mt, +40%), Jamaica (1,108 mt, +32%), Morocco (868 mt, +249%), and Angola (373 mt, +126%), while exports were steady to Japan (22,825 mt). Exports were lower to China (8,536 mt, -3%), Korea (5,486 mt, -29%), Hong Kong (3,182 mt, -38%), South Africa (2,514 mt, -76%), Indonesia (1,283 mt, -59%) and Cote d’Ivoire (554 mt, -14%). The top growth markets for the first half of the year were Mexico (+6,948 mt from last year), Egypt (+4,054 mt), Chile (+481 mt), Gabon (+394 mt), and Canada (+308 mt).
South Africa was the sixth largest market for U.S. bvm exports in 2023, and it was the ninth largest through June 2024. Jan-Jun exports to South Africa totalled 2,514 mt, down 76% from 10,312 mt last year and the slowest start to the year since 2016. Export value was down 75% from $10.6 million last year to $2.6 million this year. Livers typically account for a large share of total U.S. bvm export volume to South Africa, but through June, exports of livers totalled only 453 mt, down 93% from 6,917 mt last year. Exports of kidneys totaled 1,569 mt, down 48%, hearts were 52 mt, down 32%, and the category for other variety meats (including head meat and tongue root) totaled 435 mt, up 21%. This was the fastest pace for exports of the “other” variety meat export category to South Africa in more than two decades.
From Jan – Jun 2024, U.S. frozen beef liver exports totalled 29,332 mt, down 5% from last year, valued at $42.3 million, down 5.5%. Exports to top market Egypt have been at historically low levels since 2017, but through June 2024, exports rebounded by 22% or +3,356 mt from last year to 18,622 mt (volumes were still below 25,009 mt for Jan-Jun 2022). Year-to- date exports were also higher to most other top markets including Peru (2,321 mt, +23%), Canada (1,811 mt, +59%), Mexico (1,283 MT, +13%), Chile (968 mt, +12%), Morocco (666 mt, up from 27 mt), and Angola (375 mt, +136% and steady with 2022).After reaching over 1,000 mt per month from Apr-Jun 2023, U.S. volumes to South Africa have been sluggish since last July, and from Jul-Dec, shipments averaged 219 mt. This average dropped to 91 mt per month from Jan – May 2024, and no liver exports were reported to South Africa in June.
U.S. frozen beef kidney exports totalled 4,913 mt for Jan-Jun 2024, down 18% from 2023, valued at $4.9 million, down 20.5%. South Africa was still the top export market at 1,569 mt, but exports were down 48% from last year. Exports were higher to Gabon (1,310 mt, +46%) and Jamaica (635 mt, +69%), but exports were lower to China (501 mt, -11%), Cote d’Ivoire (487 mt, -28%), and Egypt (280 mt, -33%). Monthly exports to South Africa have been gaining momentum in recent months, and after averaging 146 mt per month in Q1 2024, exports averaged 377 mt per month in Q2 and reached 447 mt in June, which was the highest monthly volume since March 2023.
The main suppliers of bvm to Africa are the EU, Brazil, India, Argentina, Australia and the U.S. South Africa is the top market for the U.S. and Australia, while top markets for the other exporters include Ghana, Cote d’Ivoire, DROC, ROC, Senegal, Angola, Mozambique, Liberia, and Gabon. South Africa’s bvm imports totalled 20,540 mt from Jan-Jun 2024, down 12% from last year valued at $24.9 million, down 10%. Volumes were lower from the U.S. and Argentina but were higher from Australia, NZ, the UK, and EU. Beef liver imports accounted for over half of the volume total at 10,882 mt through June, down 13% from last year and valued at $8.95 million, down 16.5%, as volumes slowed significantly from the U.S. but were higher from other suppliers. Total Jan-Jun beef liver imports were higher than in 2021 and 2022, but volumes are still more than a third lower than in 2019 and 2020.
U.S. beef production decreased by 4.7% in 2023, and USDA’s latest forecast is for 2024 production to decrease just slightly year-over-year (-0.9%) to 12.13 million mt, which would bring production to the lowest level since 2017.USDA has been revising its forecasts for 2024 production as higher year-over-year fed slaughter is offsetting most of the decrease in non-fed beef production (which is being driven by sharply lower beef cow slaughter due to smaller inventories of beef cows).
USMEF Africa Aug 2024
Fed beef production is actually running up 1.0% from last year through early Aug as record cattle weights are offsetting lower steer and heifer slaughter. Fed beef production decreased by 4.3% in 2023, which was the first annual decrease since 2015. Production continued to run lower year-over-year from Jan through Mar 2024, but fed beef production levels have been mostly higher than last year from Apr through early Aug. Year-to- date steer and heifer slaughter is only down 1.5% from last year as supplies of slaughter-ready cattle in feedlots remain relatively large, which will support fed beef production through the end of this year before cattle on feed inventories are expected to tighten. Cattle weights are at record highs this year, with steer carcass weights averaging up 2.6% year-to-date, with weights at 923 lbs. in early Aug, up 3.1%. The heavier weights and longer time on feed also mean strong grading performance. Year-to-date, 10.6% of fed beef production is grading Prime, up from 9.2% last year and steady with the 2021 record high. 73.0% of production is grading Choice, compared to 73.5% last year. So, while total fed beef production is up 1.0% from last year, Prime beef production is up 16.6% while Choice is up 0.2%. USDA expects 2025 production to be down 4.8% to 11.54 million mt, which would be the lowest since 2016. That would mean that the year-over-year volume decrease in 2025 would be similar to the volume decrease in 2023. Beef production is not expected to increase again until 2027 as the U.S. was still liquidating females through the first half of 2024, and once the beef cow herd stabilizes, it takes two years for a higher beef cow herd to lead to larger production. There is anecdotal evidence that some pockets of herd rebuilding are beginning, and producer decisions at weaning time this fall will be key to understanding the extent of female retention. The Choice beef cutout has been mostly above year-ago levels in 2024, and the cutout reached a seasonal peak of $3.30/lb. the first week of Jul. For the week ending Aug 23, the cutout averaged $3.16/lb., steady with last year but up 20% from 2022.
U.S. pork production is running up 1.5% from last year through early Aug, and USDA expects 2024 pork production to increase by 2.7% to 12.72 million mt (carcass weight) on strong growth in Q3 and Q4. USDA expects further growth next year, with production expected to surpass the 2020 record. Pork production has been increasing despite significant producer financial losses in 2023 as cuts to the breeding herd have been outweighed by record productivity as measured by the number of pigs saved per litter. Breakeven production costs are lower than last year based on a significant decrease in feed costs, but other producer costs remain at record highs. Prices for wholesale frozen trimmed medium spareribs have been above year-ago levels since Feb, and prices were supported by grilling season demand in the spring.The U.S. exported a record share of pork/variety meat production at 30.5% in the first half of 2024. U.S. Jan – Jun exports to Africa were the highest since 2017 at 707 mt, and along with South Africa, the other top markets in the region were Gabon, Angola, DROC, & Sierra Leone.
PAGE 08
Sources: TDM, USDA/AMS, USDA/NASS, USDA/WASDE, USDA/FAS