International Meat News

BEEF

In March, U.S. beef exports reached 108,218 metric tons, marking a 10% decrease from the substantial volume recorded a year earlier. However, this was still the highest monthly total for 2024. The export value stood at $889.9 million, slightly down by 0.3% year-over-year but representing the highest value since June 2023. For the first quarter of 2024, beef exports amounted to 311,865 metric tons, a 4% decline from the previous year. Notably, the export value surged by 6% to $2.48 billion.

USMEF President and CEO Dan Halstrom highlighted the robust beef demand in the Caribbean, noting a strong recovery in the Middle East and positive trends in Korea and Japan. He remarked, “Despite supply challenges, the international value of U.S. beef is highly encouraging, as shown by March’s export value surpassing $450 per head.”

March was a standout month for U.S. beef exports to the Caribbean, which saw a 16% year-over-year increase to 3,398 metric tons, the third highest on record. The export value rose 12% to $31.1 million, the second highest on record. This growth was driven by record exports to the Dominican Republic, which jumped 17% to 1,238 metric tons, with export value skyrocketing 30% to a record $15.4 million. First-quarter exports to the Caribbean increased 18% in volume and 14% in value, with significant gains in the Netherlands Antilles, Leeward-Windward Islands, Cayman Islands, Barbados, and Turks and Caicos Islands. Trinidad and Tobago saw dramatic growth in beef variety meats.

The Middle East experienced a significant rebound in demand for U.S. beef, with March exports up 30% year-over-year to 5,342 metric tons and export value rising 22% to $22.2 million. First-quarter exports to the region increased 41% in volume and 40% in value, driven by larger beef variety meat shipments to Egypt and substantial muscle cut exports to the UAE, Kuwait, and Qatar.

Although March beef export volume to Mexico fell for the first time in 15 months, the market performed well with 16,628 metric tons, down 5%, but export value increased 3% to $100.2 million. First-quarter exports to Mexico rose 12% in volume and 18% in value. Brazil has emerged as a significant supplier, becoming the second-largest beef supplier to Mexico since gaining access last year.

Other first-quarter results for U.S. beef exports included:

• March beef export value per head of fed slaughter was $454.62, up 14% year-over-year, the highest since July 2022. The January-March average was $407.91 per head, up 9%.
• Exports accounted for 15% of total March beef production and 12.6% for muscle cuts, up from 14.6% and 12.3%, respectively, a year ago. First-quarter exports accounted for 13.9% of total production and 11.6% for muscle cuts, slightly down from last year.

Despite a decline in volume, beef exports to South Korea achieved higher value. March exports totaled 22,105 metric tons, down 14% year-over-year, but value increased 5% to $211.2 million. First-quarter exports to Korea were down 8% in volume but up 10% in value.

March beef exports to Japan edged higher in value at $168.6 million, up 1% year-over-year, despite a 7% decline in volume to 21,412 metric tons. First-quarter exports to Japan fell 10% in volume but were only slightly down in value due to a weak yen impacting consumer purchasing power.

March beef exports to Central America decreased in volume but increased in value, driven by strong growth in Guatemala and Panama. First-quarter exports to the region rose 4% in volume and 15% in value.

First-quarter beef exports to Canada dipped slightly in volume but saw a significant 17% increase in value.

March beef exports to Taiwan slumped in volume and value, pushing first-quarter exports 18% below last year’s pace in volume and 6% in value.

March beef exports to China/Hong Kong fell in both volume and value, with first-quarter exports down 7% in volume and 2% in value.

First Quarter Lamb Exports

March lamb exports were 35% below last year at 246 metric tons, with export value down 5% to $1.5 million. However, first-quarter exports fell only 5% in volume but increased 19% in value, led by growth in the Caribbean, Mexico, and Canada.

International Seafood Market News

Despite South China Sea Standoff, Filipino Officials Attend Fishery Talks in China

SUPPLY & TRADE

In a surprising move amid heightened maritime tensions, the Philippines has accepted China’s invitation to participate in a forum on sustainable fisheries in the South China Sea. This comes even as Filipino and Chinese vessels are engaged in escalating confrontations in the contested waters.

Recently, over 100 Filipino fishing boats were blocked by Chinese navy vessels from entering the Scarborough Shoal, a disputed territory claimed by both nations in the South China Sea. Despite these clashes, senior fishery officials from the Philippines, along with representatives from Brunei, Cambodia, Indonesia, Malaysia, Myanmar, and Thailand, attended the forum hosted on May 9 by the South China Sea Fisheries Research Institute, part of the Chinese Academy of Fisheries.

The forum, held in Fangchenggang, a port city near the Vietnamese border in the Guangxi region, focused on sustainable fisheries management. The attendees discussed strategies for reviving fish stocks and were invited to witness the annual release of fish fry by Chinese and Vietnamese officials, marking the start of a joint effort to rejuvenate fish populations in the Gulf of Tonkin (Beibu Gulf).

Fangchenggang has become a crucial trade bridge between China and Vietnam, attracting numerous Chinese companies relocating manufacturing operations to take advantage of cheaper labor and better access to U.S. and E.U. markets. The city is home to major seafood industry players, including Xianmeilai Food Co. and Haishitong Fishery (Guangxi Hiseaton Foods Co.).

Wang Xueguang, vice president of the China Aquatic Products Processing and Marketing Alliance (CAPPMA), highlighted Southeast Asia’s growing importance as a trading partner for Chinese seafood companies. He emphasized the region’s role in the future of China’s seafood trade during his remarks at the forum.

This forum signifies a complex interplay of diplomacy and economic interests, where collaborative efforts in fisheries management continue despite ongoing territorial disputes. It underscores the necessity for regional cooperation in ensuring the sustainability of shared marine resources in the South China Sea.

International Dairy News

Northern Ireland’s Largest Agri-Food Investment to Boost Cheddar Production

INDUSTRY NEWS

Dale Farm, a leading dairy cooperative in Northern Ireland, has announced a monumental £70 million investment to expand its cheddar cheese facility at Dunmanbridge in County Tyrone. This investment, the largest ever in Northern Ireland’s agri-food industry, aims to increase cheddar cheese production by an impressive 20,000 tonnes annually.

Dale Farm, owned by 1,280 farmer members, processes nearly 1 billion litres of milk each year. The cooperative reported an annual turnover of £728 million in 2023, reflecting its significant growth and robust market presence.

Largest Investment in Northern Ireland’s Agri-Food Industry

This substantial investment will integrate state-of-the-art technologies and equipment at the Dunmanbridge site, significantly boosting production capacity while achieving notable sustainability gains. The expansion aligns with Dale Farm’s strategy to solidify its position as a leading European cheddar manufacturer.

Nick Whelan, Dale Farm’s Group Chief Executive, emphasized the cooperative’s commitment to quality and sustainability. “Dale Farm has built a strong reputation in cheddar production, and this investment will support our growth and capability, positioning us as a leading cheddar player in Europe,” Whelan said. He added that the dedication and ingenuity of the Dale Farm team are crucial to the cooperative’s success, with exports already reaching 40 countries worldwide.

Expansion Details

The expansion project, already underway and scheduled to be operational by February 2025, includes:

• A new high-speed automated cheese slicing line
• Increased warehouse space
• Investment in new patented products and processes

The facility’s increased capacity will also enhance its whey protein concentrate production. The integration of advanced energy-efficient technologies and new production processes is expected to reduce the site’s carbon footprint by an estimated 4,500 tonnes per year compared to milk powder production.

Whelan stated, “We aim to lead the sector in Northern Ireland and beyond, cementing our region as a global leader in quality, sustainability, and innovation. This expansion will significantly reduce our carbon footprint, marking another milestone towards our journey to net zero.”

Implications for the Dairy Industry

This expansion comes on the heels of several years of impressive growth for Dale Farm, driven by strong customer demand across the UK, Europe, and other global markets. The cooperative’s continuous improvement in technology and sustainability practices highlights its commitment to future-proofing its operations and maintaining its competitive edge in the global market.

International Container Shipping News

Booming May Rates Mask Looming Capacity Bomb

INDUSTRY INSIGHTS

Since 2 May, container shipping rates have surged by 28.8% due to congestion at Asian ports, increased U.S. import demand, reduced capacity from Asia to Europe, and geopolitical risks in the Red Sea. This spike, however, hides a potential overcapacity issue looming on the horizon.

Drewry Shipping consultants reported that container freight rates had fallen by 2.6% week-on-week between 25 January and early May, boosting the financial performance of shipping companies and their share prices by 19% year-to-date. However, these rising rates are driven by short-term factors like Asian port congestion, empty container repositioning, and a capacity squeeze on European trades resulting from Red Sea diversions.

Capacity Challenges

Alphaliner highlighted that despite the delivery of 1.14 million TEUs of new capacity this year, the three major shipping alliances—Ocean Alliance, 2M, and THE Alliance—still lacked 36 ships to fully staff their 25 Asia-Europe loops as of 10 May. If Suez Canal transits resume, carriers could redeploy approximately 54 vessels, totaling around 764,100 TEUs.

Stefan Verberckmoes, an Alphaliner analyst, warned of a potential overcapacity issue if the Red Sea diversions are resolved, noting that carriers have restructured their networks with new rotations considering the Cape route. An additional 2 million TEUs are expected to be delivered this year, which will help mitigate the current 10% shortage on Asia-Europe routes.

Verberckmoes also noted that extra tonnage is needed for services from India to Europe and from Asia to the U.S. East Coast, which will help balance the capacity. He expects a strong peak season, indicating that the additional capacity is still needed.

Current Situation and Future Outlook

As of 10 May, Asia to Europe services operated by the three main alliances involved 340 ships, 36 short of the required number for 25 loops, forcing lines to cancel 9.6% of all weekly sailings. The Ocean Alliance was short of 20 ships, while 2M and THE Alliance each needed eight more vessels. To address the capacity discrepancy, Maersk and MSC have resumed vessel sharing agreements.

Contributing Factors to Rate Spikes

In addition to the Red Sea crisis and vessel shortages, other factors have contributed to the spike in freight rates:

1. Rising Consumption in China: During the Labour Day holiday (1-5 May), consumption surged due to government incentives promoting home renovations and the replacement of old goods. Subsidies up to CNY 10,000 (US$1,380) for electric or hybrid vehicles boosted sales of vehicles, home appliances, and furniture by 5-8%. E-commerce sales grew nearly 16% year-on-year, and Shanghai port’s throughput increased by 4% in April to 4.18 million TEUs.
2. Canadian Railroad Strike Threats: Concerns over a potential strike by Canadian rail workers pushed up Transpacific rates. Canadian National Railway and Canadian Pacific Kansas City are negotiating with Teamsters Canada Rail Conference to avert the strike planned for 22 May.
3. Increased U.S. Consumer Demand: U.S. containerized imports are rising, driven by strong consumer demand. The National Retail Federation reported that March import volume at major U.S. ports reached 1.93 million TEUs, a nearly 19% increase from the previous year. KOBC expects U.S. demand fundamentals to continue improving, potentially exceeding 2 million TEUs by the third quarter.

These factors illustrate the complex and dynamic nature of global shipping markets, where short-term disruptions can mask longer-term capacity challenges. Stay informed with our newsletter for the latest updates and insights into the shipping industry.

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