Friday’s International Trade Report showed US pork exports for the month of June at 449 Mil Lbs, a 66 Mil Lbs decline from May but still 18 Mil Lbs more than a year ago. It was the largest June export total since 2008 and the 2nd largest on record, with strong year over year increases noted to most major destinations. Exports to China have so far been disappointing, as this was the market that many in trade had hoped would be a source of major export growth this year. Canadian imports are down slightly amid growth in the Canadian herd. At mid year, the US has exported 2.9 Bil Lbs, a 12% increase over last year and 50% of the USDA’s annual forecast. With an outlook for increasing production and lower prices, we do not expect that the USDA will greatly alter their forecast until later in the year, when more trade data is available.
Beef exports in June totaled 239 Mil Lbs, a 36% increase over a year ago, the largest June export total since 2011, and the 3rd largest June figure on record. Except for Hong Kong, June shipments to all major customers registered triple digit gains for the month, and cumulative exports for the year are ahead of last year to all destinations. Following the June agreement with China to allow US beef imports, there were 80 Mil Lbs shipped to China in June. This was the largest export figure to China since June 2015. Commercial sources suggest that is strong Chinese interest for exports in late 2017 and early 2016. The latest USDA forecast calls for a 10% increase in annual beef exports to a record large 2.8 Bil Lbs, and the current pace is on track to reach the forecast.
While red meat exports increased during the month, so to did the monthly import pace. Pork imports totaled 95 Mil Lbs, or an 11 Mil Lb increase from last year but make up just 3% of total pork supplies. Beef imports are far more significant to both the total red meat supply and the beef market. Beef imports at 295 Mil Lbs were above the export total, keeping the US a net beef importer for the 4th consecutive month. 70% of all imports were sourced from the 3 countries of New Zealand, Canada, and Australia. The US suspended imports of fresh beef from Brazil in late June, though Brazilian imports still totaled 16 Mil Lbs. Seasonally, beef imports tend to decline in the last half of the year, and with record large total red meat production expected in the 4th quarter, the US market does not need any additional protien supply.
