U.S. beef exports continue to face a multitude of economic headwinds and have fallen significantly from last year’s record levels. On top of fewer exportable supplies due to lower domestic production, U.S. beef is more expensive on the global market due to the combination of higher domestic beef prices and rising exchange rates to some of the top markets. Exporters are also facing weaker demand in parts of Asia due to economic slowdowns and increased competition from Australia. All of these challenges combined to push July monthly exports down to 240 million pounds, nearly 22 percent lower year over year and 15 percent below the 5-year average. Year-to-date exports are down 13 percent year over year but only 1 percent lower than the 5-year average.

South Korea remains the top destination for U.S. beef so far this year, though exports to the country have fallen since March, decreasing to less than 47 million pounds in June, 26 percent lower year over year. Exports to Japan have been consistently low since March and fell 37 percent below a year ago in July. Exports to China in July dropped more than 10 million pounds from June and more than 35 percent lower year over year. Exchange rates to these top three beef markets have been mostly climbing throughout the year, making U.S. beef more expensive. In addition, beef exports from Australia to China and South Korea have increased more than 40 and 20 percent, respectively, and the unit value of beef exports from Australia is lower year over year. U.S. and Australian beef exports through July to the top four Asian markets for U.S. beef. U.S. exports to all four countries have declined, while Australian exports to most of these markets have increased compared to the same period last year.

As shown in the chart, among the top six markets, year-to-date exports are down to every country except those in North America. Exports to Mexico are up 15 percent. The exchange rate between the United States and Mexico has declined throughout the year, more than offsetting increases in unit values and making U.S. beef more affordable compared to last year. Exports to Canada are up just over 1 percent from last year. Although not depicted in the chart below, year-to-date exports to Hong Kong are up nearly 23 percent year over year; this year has been the first year-over-year increase since 2018.

Based on the current pace of exports and expected lower demand from Asia, the third-quarter forecast is lowered 100 million pounds to 740 million and the fourth-quarter forecast is lowered 60 million pounds to 730 million. The annual export forecast is 3.054 billion pounds, a year-over-year decrease of nearly 14 percent. With fewer exportable supplies and expected challenges to the price-competitiveness of U.S. beef on the global market in 2024, the annual forecast for 2024 is lowered 70 million pounds to 2.900 billion pounds. This would be a year-over-year decrease of 5 percent and the lowest level of annual exports since 2017.