U.S. beef and pork exports performed extremely well in August, despite growing concerns about global financial conditions and an upward surge for the U.S. dollar that has diminished the purchasing power of some major trading partners’ currencies.

August beef export value shatters all-time monthly record

August beef plus beef variety meat exports surpassed July totals by almost 15 percent, and set a new, all-time monthly record in terms of value. The record total of $416 million exceeds the previous record of $387 million - set in June 2003 - by 7.5 percent. Year-to-date, beef exports have recovered 93 percent of value and 75 percent of volume when compared to January-August 2003.

Mexico and Canada continue to perform remarkably well for U.S. beef, as they combined to account for about 60 percent of beef export volume and 63 percent of export value in August. Beef exports to Mexico - which had set a record for both value and volume in July - set another value record of $150.6 million despite a small decline in volume from the previous month. For January-August, beef exports to Mexico climbed 19 percent in volume (to 279,735 metric tons or 616.7 million pounds) and 25 percent in value (to $975.5 million) over 2007. Beef exports to Canada have increased 35 percent in volume and 38 percent in value over last year, to 109,717 metric tons (241.9 million pounds) and $513.8 million, respectively.

Beef exports to Japan over the first eight months of 2008 totaled 51,279 metric tons (113 million pounds) valued at $265 million, representing an increase of 64 percent in both volume and value over last year. While August results in Japan remained strong (6,951 metric tons or 15.3 million pounds), the volume slowed from its June-July peak - which is likely due to a decline in available cattle less than 21 months of age. USMEF-Tokyo’s introduction of alternative beef cuts into Japan should help maintain strong volumes through the winter months, despite the shortage of Japan-eligible cattle. While the U.S. dollar has strengthened sharply against many foreign currencies, the Japanese yen has maintained a strong level of purchasing power. It is important to note, however, that the Australian dollar has declined about 30 percent against the yen over the past 90 days, which has provided Australian beef with a! price advantage in this market.

Beef exports to Russia are being adversely impacted by global currency trends. January-August exports to Russia totaled 28,956 metric tons (63.8 million pounds) valued at $67.5 million, and August exports set a new monthly value record at nearly $25 million. However, sales have slowed in recent weeks due to economic conditions, devaluation of the ruble against the U.S. dollar, and a decline in the Brazilian real - which has restored much of the price advantage Brazilian beef has historically enjoyed in this market.

“While August was still a strong month for beef and beef variety meat exports to Russia, we expect to see a slowdown in the fall months – especially for muscle cuts,” said US Meat Export Federation President and CEO Philip Seng. “Russia’s beef demand is always somewhat seasonal, and other economic conditions are working against us there as well. But despite the downturn, we’re pleased with the performance for U.S. beef in Russia in what is essentially our first year back in that market since 2003.”

Beef exports have gained traction in South Korea, with August totals of 12,404 metric tons (27.3 million pounds) valued at $62.7 million. Seng cautioned, however, that the U.S. beef industry faces a challenging environment as it attempts to reclaim what was once its third-largest export market.

“While the distribution of U.S. beef continues to expand in Korea, it is still largely absent from the shelves of large discount retail chains,” Seng said. “Key large discounters have not yet announced plans to restart U.S. beef sales, and traders regard such an announcement as a watershed for jump-starting sales to other retail stores, as well as to large hotels and foodservice chains.”

He added that the Korean won has been one of the weakest-performing Asian currencies this year, having lost about one-third of its value against the dollar since U.S. beef reentered the market this summer.

Other Asian markets are performing extremely well for U.S. beef, as exports to the ASEAN region set a new record in August with a volume of 5,416 metric tons (11.9 million pounds) valued at $17.5 million. Vietnam currently accounts for about 71 percent of the volume and 75 percent of the value of ASEAN purchases, making it the fifth-largest market for beef exports (by value) in 2008. The fourth-largest market is Taiwan, where January-August beef exports have increased 38 percent over last year to 19,388 metric tons (42.7 million pounds) valued at $91.2 million.

Beef exports to the Middle East also showed strong performance in August, with a value of $16.8 million. Exports to the Middle East thus far in 2008 are down 2 percent in volume from last year but have increased 37 percent in value to $97.8 million. Egypt’s purchases of livers and other variety meats account for much of this increase in value, due in part to strong buying competition from Russia. Muscle cut exports to the Middle East also have increased dramatically this year, with the United Arab Emirates, Saudi Arabia and Kuwait being the top-performing markets.