- In August, U.S. beef exports exceeded $750 million for the first time and set a new record high, according to the U.S. Department of Agriculture and U.S. Meat Export Federation (USMEF). The previous record high of $722.1 million was recorded in May.
- August beef exports also set a volume record for the third month in a row — an increase of 11% year-over-year. From January through August, beef exports totaled 899,300 metric tons, which was up 9% from a year ago.
- Pork exports have been hurt by tariffs in China and Mexico. U.S. pork export values in August fell 21% in Mexico and 32% in China. In August, pork export value fell 3% from last year to $494.1 million, while the volume of pork exports was down 1% from last year at 182,372 metric tons, USMEF reported.
The U.S. beef and pork industries are heavily reliant on trade, and both have faced challenges from retaliatory tariffs in the wake of trade issues. It is not surprising that beef exports are on the rise after long-standing tariffs were lifted, but now the challenges have shifted to the pork industry. Although it looks optimistic for U.S. beef exports, new trade deals and negotiations will continue to impact meat exports and the future of trade for these industries will continue to be complicated.
Beef has struggled with trade troubles and retaliatory tariffs for years, but its recently cleared through fewer tariffs and new opportunities.
Japan has had quickly changing tariffs, which have had a large impact on trade. A 50% tariff on U.S. frozen beef exports — temporarily imposed because exports exceeded a temporary quota in Japanese law —expired in March. This could be one reason why beef exports to Japan climbed 8% from a year ago in August.
But USMEF President and CEO Dan Halstrom said in a release there still could be a better agreement for exports to Japan, especially as Australian beef tries to gain market share. The U.S. is currently working to keep favorable trade terms in Mexico, Canada and South Korea, and talks with Japan are ongoing.
Another reason beef exports are booming is because China reopened its doors to the U.S. meat last year, after 14 years of being closed.
While trade with China has reopened, it likely could be better. U.S. beef still faces retaliatory duties there. In July, the country's tariff on U.S. beef increased from 12% to 37%.
While beef has exceeded expectations, pork is facing challenges. The industry is struggling with tariffs from China and Mexico.
Negotiations on the trade agreement between the U.S., Mexico and Canada were ongoing this year, which hurt pork exports. Mexico — which didn't previously have a tariff on U.S. pork — imposed one at 10% in June, which doubled to 20% in July. Because of the struggle, the U.S. Department of Agriculture made a package of subsidies available to pork producers this summer.
Although it hasn't been signed yet, the proposed United States-Mexico-Canada Agreement could remove Canadian tariffs on prepared beef products and the Mexican tariffs on pork that were also put in place earlier this year, according to a new report from CoBank. But that isn't confirmed since a lot could still happen between now and when the new trade deal is officially signed.
"Pork exports have posted an impressive performance in 2018, but the retaliatory duties are a clearly a significant obstacle," Halstrom said. "The fact that U.S. trade officials were able to secure duty-free access for U.S. red meat in the new U.S.-Mexico-Canada Agreement is critically important, and we are hopeful that duty-free access for U.S. pork entering Mexico will be restored soon."
While pork exports to Mexico could be helped from the USMCA, the status of trade with China — one of the primary targets of the Trump administration's trade war — is still up in the air. In July, China's pork duty rate jumped to 62% from 37%. The pork industry has been greatly impacted by these tariffs, and negotiations between the countries have not made much public progress.
The food industry has always been dependent on exports, making it a bargaining tool for trade deals between countries. Food industry executives and exporters will likely continue to lobby for lower tariffs and more trade agreements, while concerns for the future of meat exports will continue in new ways. Considering the sometimes volatile nature of trade between the U.S. and other countries right now, there could be big changes in just a short period of time.