31 October 2007

5 minute read

North America

Acting Secretary of Agriculture Chuck Conner said the United States remains committed to gaining greater access for U.S. beef and pork internationally. He said although the progress has been slower than anyone would like, he commended USMEF members for finding ways to grow U.S. red meat sales worldwide.

“We are on track for another record year for total U.S. agricultural exports, expecting them to come in at about $79 billion and exports of beef, pork and lamb are on track to account for about $5.2 billion of that amount,” Conner said. “These exports are an important part of our economic and national economies, contributing heavily to provide jobs for Americans.”

Conner stressed the United States is pushing its trading partners to allow U.S. red meat access based on scientific standards. He said the United States is committed to live by those rules and it is only fair that other nations do the same.

“We must continue to demand that our trading partners base sanitary and phytosanitary standards on sound science,” Conner said. “This gives all the nations in the world an objective measure on which food products are safe, it takes politics out of the decisions that should be made on consistent, transparent and scientific grounds.”

Shayle Shagam, of USDA World Agricultural Outlook Board, said meat trade is increasingly important to the United States as exports continue to rise. He said continued economic growth in Asia, Russia and Mexico bodes well for an increase in meat demand. As a weaker U.S. dollar helps exporters, things to watch out for include drastic weather conditions and disease issues.

A decline in self sufficiency worldwide can only result in an increase in trade to meet the needs spurred by population growth, according to USMEF Manager, Research and Analysis Erin Daley. Carcass optimization and the unique factors of meat production, such as grain-feeding and highly efficient production, give the United States advantages competitors are unable to reach.

“As market access is regained in areas like Russia, expect to see an increase in price for liver exports, for example, since currently we send almost all our beef livers to the Middle East due to their high quality and taste,” Daley said. “In South Korea, we’ve seen a higher price for short ribs and chuck items in general to Asian markets. Expect those prices to increase as market access is regained.”

Daley also said that even as U.S. beef regains market access, the gains and relationships made by the U.S. pork industry will maintain growth in pork exports. Due to the strong acceptance of USDA approved meat, demand will continue to increase worldwide.

An area expected to experience those increases continues to be Japan since disposable income is high and most of it is spent on food and fashion since housing is not a growing area. Many consumers are becoming more health conscious, turning their attention to U.S. beef since it is leaner than domestic Waygu, for example. “The dollar is also weaker than the yen, providing U.S. exporters an advantage for the time being,” said USMEF Japan Director Greg Hanes.

The United States faces stiff competition in the market from Australia, however. “Japan is a key battle ground for Australia,” Hanes said. “Australia is vulnerable right now due to the drought conditions they face at home, but the U.S. beef industry is limited on how much market share it can regain due to the limitation of U.S. beef required to come from 20-month-old cattle.”

Meanwhile, Japan remains the No. 1 destination for U.S. pork exports and South Korea is gaining ground as well. Korea has become a major pork importing country and the United States is taking advantage of it, USMEF Senior Vice President, Asia Pacific Joel Haggard said. Inconsistent U.S. beef supply has prompted restaurants to retain U.S. pork menus and retail chains have experienced little change in U.S. pork sales.

Haggard also said that China is becoming more urbanized with large growth in second-tier cities. Many Chinese are increasing wealth in the stock markets and through real estate. As outbound tourism to areas like Europe and the United States increases, consumers are returning with new demand for a variety of cuisines, which increases opportunity for U.S. red meat.

Haggard also pointed to Macau as a large growth area as gambling revenue now exceeds that of Las Vegas and is on pace to exceed the entire State of Nevada by 2008. More than 36 million visitors will be accommodated by an additional 13 international luxury hotels by 2010. “It’s like Las Vegas on steroids,” Haggard said.

In Mexico, excellent market access has led to continued U.S. red meat export growth in Mexico, said Chad Russell, USMEF Regional Director, Mexico and Dominican Republic. Russell indicated poultry has become the preferred meat in Mexico, decreasing demand primarily for beef and slightly for pork. However, with continued economic and population growth, Russell expects Mexico to remain a top market for U.S. red meat.

And with beef production declining in the European Union (EU) and a continued dissatisfaction with Brazil, the main EU supplier, there are increased opportunities for U.S. beef, despite the non-hormone-treated-cattle requirement that typically limits exports. High feed prices also could damage the EU’s self-sufficiency in the pork sector, according to John Brook, USMEF Regional Director, Europe, Russia and the Middle East.

Brook also said once the United States regains consistent access to Russia, U.S. beef livers will reestablish their market prominence and drive up the price as the Middle East continues its demand for livers. Although exporting to the Middle East requires Halal certification, there are generally few restrictions and low import duties.

Market issues such as these points to the globalization taking place worldwide and the rules of governance that come into play and create stresses on fair and balance trade. This symposium exposed some of those stresses and identified advantages and threats on the horizon in exporting U.S. red meat.

The U.S. Meat Export Federation is the trade association responsible for developing international markets for the U.S. red meat industry and is funded by USDA, exporting companies, and the beef, pork, lamb, corn, sorghum and soybean checkoff programs.

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