Derrell S. Peel, Oklahoma State University
Beef exports in January were down 15.7 percent year over year. Despite record beef exports in 2022, signs of a weakening beef trade picture were developing late in the year with beef exports down year over year in both November and December. A strong U.S. dollar peaked in late 2022 and has decreased, but remains high, provided export headwinds that appear to be taking a toll.
The biggest decrease in January exports was South Korea, down 36.8 percent year over year. The dollar appreciation to the South Korean Won was particularly acute in late 2022 but has moderated somewhat since last October. In 2022, beef exports to South Korea increased 3.2 percent to a new record level and giving South Korea a 22.8 percent share of total U.S. beef exports, remaining the number two export market, but just fractionally lower than Japan.
Beef exports to China/Hong Kong were also down 24.2 percent year over year in January. Slower beef exports to China/HK were not an issue of exchange rates as much as the broader slowdown in the Chinese economy, perhaps aggravated by political tensions between China and the U.S. China/HK was the number three beef export market in 2022 with a 20.1 percent share of total beef exports. Beef exports to China/HK grew by 7.1 percent year over year in 2022, much slower than the previous two years but still the most growth among major U.S. beef export markets.
There was some good news in the January beef export data. Despite exchange rate headwinds, January beef exports to Japan were up 6.9 percent year over year. Beef exports to Japan decreased 1.9 percent annually in 2022. Japan remains the largest export market for the U.S., with a 22.9 percent share of total beef exports in 2022.
Beef exports to Mexico also increased, up 30.8 percent year over year in January. This follows a 10.3 percent decrease year over year for the entire year in 2022. The Mexican Peso did not experience the same currency devaluation to the U.S. dollar as did the Asian currencies in 2022. Mexico was the number four U.S. beef export market in 2022 with an 8.0 percent share of total beef exports.
January beef exports to the number five market Canada were about equal to one year ago, up just 0.4 percent year over year. Canada represented a 7.7 percent share of total beef exports in 2022. Beef exports to the number six beef export market, Taiwan, were down 34.0 percent year over year in January. In 2022, beef exports to Taiwan were 5.7 percent of total U.S. beef exports. The top six beef export markets accounted for 87.2 percent of beef exports in 2022.
Challenges for beef exports are likely to increase in 2023 as the headwinds due to the strong dollar will continue. Additionally, anticipated decreases in beef production began in February and will decrease beef availability and keep wholesale beef prices strong. Beef demand, including international demand, remains a significant concern going forward as declining beef production will pressure beef prices to push even higher than current levels.
