Meat+Poultry - July 2018 - 34




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| 07.18 |

customers with a wider range of cuts and menu items.
But US beef's popularity is also strengthening in other
Asian markets and in the Western Hemisphere, he says.

Mexico was again the pacesetter for pork exports.
Through the first four months, exports to Mexico were
7 percent above last year's record volume at 282,675 mt,
with value up 6 percent to $505.4 million. But maintaining
this pace will be challenging, with Mexico announcing
retaliatory tariffs on imports of most US pork products
that took effect June 5, USMEF says.
The tariff on unprocessed US pork products, notably
legs and shoulders, began at 10 percent and increased to
20 percent July 5. The tariff does not include pork variety
meats but it will impact the export of US hams to Mexico.
Hams represent 75 percent of all US pork exports to
Mexico. Exports in 2017 totaled 40 million hams.
Red meat exports so far this year are well above US
Dept. of Agriculture's forecasts it made at the start of the
year. But analysts and exporters see no reason why they
should slow down in the second half. Andrew Gottschalk,, doubts they will. Just as wages
are being boosted in the US, so too are wages abroad
increasing and thus demand for protein, he says.
Fed beef processing margins began the year stronger
than a year ago. The first quarter saw negative margins
in February, but they still averaged $25 per head for the
quarter, according to data. That went
against $2.63 per head a year earlier. Margins improved
dramatically in April and May due to strong beef demand,
larger weekly slaughter levels and significant erosion in
live cattle prices.
Margins set new records of nearly $292 per head the
first two weeks of June. This far exceeded the previous
record of $228 per head set the last week of June last
year. Margins for the first 10 weeks of the second quarter
averaged $153 per head, according to
This likely guaranteed record earnings for any quarter for
all fed beef processors.
Pork margins in the first half were unable to match
their record performance in 2017. But they still averaged
$20 per head in the first quarter and nearly $19 per head
in the first 10 weeks of the second quarter. Margins
though went into single digits the first week of June as
wholesale pork prices fell to nearly 16 percent below
the same week last year, while live hog prices were only
8 to 9 percent lower. This caused pork processors to
reduce their slaughter levels from the record high levels
seen early in the year (which reflected added processing
capacity from the year).
The big corporate news in the first half was the $969
million acquisition of 51 percent of National Beef Packing

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