Cattle futures softened Tuesday as wholesale beef values continue to languish ahead of the expected seasonal uptick.
Live Cattle futures closed an average of 69¢ lower.
Feeder Cattle futures closed an average of $1.02 lower.
Wholesale beef values were weak on Choice and higher on Select with light to moderate demand and offerings, according to the Agricultural Marketing Service.
Choice boxed beef cutout value was 36¢ lower Tuesday afternoon at $202.85/cwt. Select was 91¢ higher at $192.72.
Major U.S. financial indices closed mostly lower Tuesday as benchmark Treasury Note yields climbed to the highest level in several years, continuing recent investor angst about rising interest rates.
The Dow Jones Industrial Average closed 56 points lower. The S&P 500 closed 4 points lower. The NASDAQ was up 2 points.
U.S. beef exports topped $750 million in August for the first time, according to data released by USDA and compiled by the U.S. Meat Export Federation (USMEF).
Specifically, August beef export value was $751.7 million, which was 11% more than the previous year, easily exceeding the previous record of $722.1 million reached in May 2018. In terms of volume, August beef exports were 7% more than the previous year at 119,850 metric tons (mt).
For January through August, beef exports totaled 899,300 mt, up 9% from a year ago, while value climbed 18% to $5.51 billion.
“U.S. beef exports continue to achieve tremendous growth, not only in our mainstay Asian markets but in the Western Hemisphere as well,” says Dan Halstrom, USMEF President and CEO. “USMEF is excited about the recent market access developments achieved by the Office of the U.S. Trade Representative (USTR) and USDA, with favorable terms being preserved in Mexico, Canada and South Korea and trade talks getting underway with Japan. A trade agreement with Japan would bring opportunities for even greater expansion as U.S. beef becomes more affordable for Japanese consumers and is back on a level playing field with Australian beef.”
Beef export value averaged $320.92 per head of fed slaughter in August, up 11% from a year ago. The January-August average was $318.66 per head, up 16%. Through August, beef exports accounted for 13.5% of total U.S. beef production, which was 0.7% more than the previous year.
Conversely, U.S. pork exports were pressured by retaliatory tariffs in China and Mexico. August pork export volume was down 1% from last year at 182,372 mt, while export value fell 3% to $494.1 million.
China’s duty rate on pork muscle cuts and variety meat increased from 12% to 37% in April and from 37% to 62% in July. Mexico’s duty rate on pork muscle cuts increased from 0% to 10% in June and then jumped to 20% in July (pork variety meats continue to enter Mexico duty-free). Beginning in June, Mexico also imposed a 15% duty on sausages and a 20% duty on some prepared or preserved hams and shoulders.
“Pork exports have posted an impressive performance in 2018, but the retaliatory duties are a clearly a significant obstacle,” Halstrom explains. “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. Tariff relief in China may not come as quickly, but USMEF continues to work with industry partners to keep as much product as possible moving to China while also working aggressively to expand exports in other key markets, including Korea, Central and South America, the ASEAN region and Australia.”
Keep in mind that U.S. beef still faces retaliatory duties in China and Canada. China’s duty rate increased from 12% to 37% in July, with the higher rate applying to all eligible products. Canada’s 10% duty, which also took effect in July, applies to cooked/prepared beef products. All other U.S. beef still enters Canada duty-free.