US: Report explores ties between meat exports and feed demand
The US Meat Export Federation (USMEF) released details regarding the link between domestic feed use in the US and the export market for animal-based proteins in an updated report – Exporting corn through US beef and pork.
The US National Corn Growers Association supported the project.
The goal of the project was to examine the impact that beef and pork exports have on corn demand and related feed ingredients, said the authors of the report.
In 2015, exports of red meat from the US required the feeding of about 11.7m tons of corn and dried distillers grains with solubles (DDGS), the federation reported. In 2018, exports were expected to use about 14.9m tons of DDGS and corn – an increase in feed used of about 29%.
The total value of corn and DDGS used to support the export market in 2015 was about $1.3bn in 2015, they said. It was anticipated to increase to about $1.9bn by the end of 2018.
“Over the baseline period of 2018-2027, the combined value of beef and pork exports to corn and DDGS is projected to reach $22.2bn – $19bn for corn and $3.2bn for DDGS,” said Dave Juday, senior analyst with World Perspectives Inc, which generated the analysis, in a release about the project.
“This cumulative 10-year total is almost 19% more than the $18.7bn projected in 2016 using USDA’s 2016-2025 long term baseline meat export forecast.”
Ties between meat production, feed use
Exports of both beef and pork have increased since 2015, the authors said. Such sales set records in 2017 and grew past that trend line in the first nine months of 2018.
The feed used to generate the meat exported from the US is considered an indirect export, they said. Indirect exports have become one of the fastest expanding areas for corn use as about one in every five bushels of additional feed demand is tied to beef or pork exports.
“Through the first three quarters of 2018, exports have totaled 11.1% of beef production based on muscle cuts (13.7% when including offal and variety meats) and 22.7% of pork muscle cuts (and 26.1% including offal and variety meats) making the red meat-derived indirect exports of corn and DDGS an increasingly important driver of value to US farmers,” they said.
In addition to growth in export market demand, domestic production for cattle and pigs has expanded since 2015, said report authors.
“Through the first nine months of 2018 fed cattle slaughter was nearly 14.7% greater, and barrow and gilt slaughter was 7.8% more, than the same period in 2015,” they added.
Although the use of feed grains dropped because fed cattle weights at slaughter are down, the increase in production volumes offset the reduction, they said.
Corn and DDGS use in swine production has remained consistent.
Production for the export market also help support productions ability to cover feed costs, the report authors said. Exports can add value to cuts that are less popular in the US.
“A positive export premium adds to the profitability of feeding, which helps both the feeder and the corn farmer,” they added.
“Beef and pork exports also have a direct impact on the utilization and value of DDGS,” the authors said. “Overall, the value of DDGS sold for feed to livestock represents about 23% of the value of ethanol per bushel of corn.”
In 2018, that amounted to about $291m in value added to DDGS, they said.
“Eliminating the demand for the more than 2m tons of DDGS utilized by beef and pork exports from the 31m ton total DDGS feed demand could mean as much as $0.03 per gallon gross margin for ethanol mills."
