The U.S. Agriculture Department said U.S. beef export sales jumped to 27,400 tons last week, the largest weekly volume since 30,129 tons during the week ended Jan. 24, 2008. That is the second largest weekly volume since a case of mad cow disease in late 2003 slashed U.S. beef exports.
"That is a major surge," Dennis Smith, a broker with Archer Financial Services, said of the latest weekly data. "We are taking market share."
Prior to the mad cow case, the United States exported about 10 percent of its beef. Exports have been recovering since then and forecasts call for exports to hit about 9 percent of production in 2010.
"World demand for beef is recovering after the upset in markets and economies in late 2008 through 2009," Erin Daley, economist with the U.S. Meat Export Federation, said in an e-mail.
This increase in demand has occurred at time when global beef supplies are tight and prices are high.
"These elevated price levels make currency fluctuations even more important and the other major beef exporters are generally facing strengthening domestic currencies while the U.S. is regaining the weak dollar advantage seen prior to the crash in 2008," said Daley.
The weak U.S. dollar has made beef, as well as other commodities, more attractive to foreign buyers.
"Obviously, the currency is a big issue for us," said Rich Nelson, an analyst with Allendale Inc.
Year-to-date, U.S. beef exports are 557,400 tons, up 30.8 percent from last year's 426,000 tons. USDA currently forecasts year-to-date beef exports to be up 18 percent from 2009.
"South Korea, Russia, and the Middle East have been the largest growth markets for U.S. beef thus far this year, with exports up across the board, excluding Mexico," said Daley.
Gains in Russia have been due in part to it taking less from Argentina and Brazil. However, U.S. beef sales to Russia should be slow for the balance of the year because a quota of 21,700 tons there has been met, said Daley.
"Argentina's exports are down by nearly 50 percent on tight supplies following two years of liquidation," said Daley. (Reuters)
