DENVER, Colo. – While January represented a solid start to 2021, the U.S. Meat Export Federation cautioned that exports still face COVID-related obstacles, and significant transportation and labor challenges.

That’s according to January data recently released by the USDA and compiled by the U.S. Meat Export Federation.

“As key destinations for U.S. red meat roll out COVID vaccination programs, the outlook for 2021 is optimistic, with retail meat demand remaining strong, and the expectation that foodservice will rebound in more and more regions,” said Dan Halstrom, U.S. Meat Export Federation president and CEO. 

“But transportation challenges are currently a dominant concern, particularly the congestion and container shortages at our West Coast ports where short-handed crews are handling record-large cargo volumes,” he added. 

He said labor is also at a premium in processing plants, which affects the industry’s ability to fully capitalize on demand for certain labor-intensive cuts, and variety meat items.

“Although the global foodservice sector still has a long recovery ahead, international demand for U.S. red meat remains impressive and resilient,” he said. “But a range of logistical challenges must be overcome in order to fully satisfy this demand.”

The report said U.S. beef and pork exports opened 2021 below the large volumes posted a year ago.

U.S. beef exports totaled 105,047 metric tons in January, down 2 percent from a year ago, while value slipped 3 percent to $653 million. 

“The decline was due mainly to lower beef variety meat shipments, as muscle cut exports were steady, with January 2020 at 81,398 metric tons, valued at $584.4 million (down 1 percent), and accounted for a larger share of production than a year ago,” the report said.

January’s U.S. pork exports totaled 248,656 metric tons, down 9 percent from a year ago, but slightly above the federation’s projections; export value was down 13 percent to $642.8 million. 

“Pork muscle cut exports were down 11 percent in volume (208,234 metric tons), and 15 percent in value ($551.3 million), while pork variety meat shipments trended modestly higher than a year ago,” the report said.

However, January beef exports equated to $311.78 per head of fed slaughter, up 3 percent from a year ago, the report said. Exports accounted for 13.3 percent of total beef production, and 11 percent for muscle cuts only, above the January 2020 ratios of 13.1 percent, and 10.6 percent, respectively.

U.S. beef exports to South Korea opened 2021 on a very strong note, climbing 20 percent from a year ago in volume (21,355 metric tons), and 22 percent in value ($158.7 million), the report said. 

On Jan. 1, U.S. beef received another tariff reduction under the Korea-U.S. Free Trade Agreement; the rate is now 13.3 percent – about one-third of the pre-free trade agreement rate of 40 percent – and will decline to zero by 2026. 

“The U.S. has a tariff advantage, compared to Australia (18.6 percent), and Canada (21.3 percent) in 2021, and tariffs do not phase to zero for Australia and Canada until 2028 and 2029, respectively, under their free trade agreements with Korea,” the report said.

Moreover, January was another big month for U.S. beef exports to China, which were up nearly 800 percent from a year ago in both volume (7,862 metric tons), and value ($58.1 million). 

“In September (2020), the U.S. overtook Australia as China’s largest grain-fed beef supplier,” the report said. “In January, Australia’s grain-fed exports to China were 3,345 metric tons, down 49 percent from 2020.”

However, Japan remained the leading volume market for U.S. beef at 22,018 metric tons, down 13 percent from a year ago, but slipped to second place in value (behind Korea) at $138.1 million (also down 13 percent). 

“Most of Japan’s major cities have been under a COVID-related state of emergency since early January that includes reduced hours for restaurants and cafes,” the report said. “Restrictions were recently eased in some areas but remain in place in the Tokyo metropolitan area. 

“Japan’s imports of U.S. beef have also been impacted by the U.S.-specific safeguard, which is likely to trigger in March, even as importers have slowed volumes to avoid reaching the safeguard threshold. If the safeguard is triggered, the duty on U.S. beef muscle cuts will increase from 25.8 percent to 38.5 percent for 30 days,” the report added.

While the federation said it expects exports to the region to remain below 2020 levels throughout the year, the report said China still has a pressing need for imported pork. 

“January exports included a mix of frozen cuts, bone-in hams, and boxed carcasses,” the report said. “Carcass export volume was 5,923 metric tons, the largest since June.

“Despite the continued 25-percent retaliatory duty on U.S. pork and pork variety meats, China’s demand for pork variety meat remains strong, with January exports of pork variety meat to China/Hong Kong increasing 18 percent from a year ago to 24,475 metric tons,” the report added.

U.S. pork exports to Japan opened 2021 on a positive note, increasing 2 percent from a year ago in both volume (32,332 metric tons), and value ($134.6 million), the report said. 

“Demand for chilled U.S. pork remains very strong in Japan’s retail sector, and the U.S. industry has reclaimed market share for ground seasoned pork since the U.S.-Japan Trade Agreement (implemented in January 2020) slashed the duty rate, and eliminated a severe tariff disadvantage,” the report said. 

“Japan’s duty rate on ground seasoned pork will notch down again on April 1 to 6.6 percent, compared to the pre-trade agreement rate of 20 percent,” the report added.

Ending a record year in 2020, the report said, “Pork exports to Central America continued to shine in January at 11,023 metric tons, up 56 percent from a year ago, valued at $26.9 million (up 43 percent). 

“January export volume was the fourth largest on record, and significantly above the usual seasonal trend, as exports more than doubled to Panama, and posted impressive growth in Honduras, Guatemala, Nicaragua, and Costa Rica,” the report said.

In addition, U.S. lamb exports climbed 7 percent in January to 1,027 metric tons, although value fell 43 percent to $1.2 million, as volume growth was driven by lamb variety meat demand in Mexico, and Canada. 

“Lamb muscle cut exports trended higher than a year ago to Bermuda, and Japan,” the report said.

Other January highlights for U.S. beef exports include:

• Following a big rebound in December, beef exports to Mexico eased to some degree to 18,045 metric tons (down 18 percent from a year ago), valued at $87.8 million (down 25 percent). However, exports remained well above the low levels posted in mid-2020 during the height of Mexico’s foodservice restrictions, and high U.S. prices resulting from supply challenges.

• After setting a fifth consecutive volume record in 2020, exports to Taiwan trended lower in January at 3,833 metric tons (down 27 percent from a year ago), valued at $38.7 million (down 11 percent). The outlook for U.S. beef remains very positive in Taiwan, based on strong retail and foodservice demand.

• U.S. beef exports to Canada continued to gain momentum in January, climbing 5 percent from a year ago in both volume (9,905 metric tons), and value ($61.8 million).

• Following a down year in 2020, U.S. beef exports to the Middle East rebounded to 6,847 metric tons, up 6 percent from a year ago, while value jumped 20 percent to $20.4 million. U.S. beef variety meat exports to mainstay market Egypt were steady last year, while muscle cuts posted impressive growth in the United Arab Emirates, Kuwait, and Saudi Arabia.