Strategizing Export SuccessWritten by Jon Kirkbride
Jon Kirkbride, Wyoming Director to the U.S. Meat Export Federation
U.S. beef export value is on a record pace in 2014 with exceptional returns being generated for producers. Having recently attended U.S. Meat Export Federation (USMEF) Strategic Planning Conference in Arlington, Va. as Wyoming’s representative to the USMEF, I hope the information I share in this report will serve as a reminder of why it is so important to remain vigilant in our efforts to expand beef exports.
This year, the average value of beef exports has reached $280 per head, which is easily a new record. Last August, we shattered the record number with a value of $326 per head. I think this is pretty impressive given that only four years ago, we were reporting values of just over $150 per head.
This was my third conference as Wyoming’s Director to the USMEF. I was appointed to the position by the members of the Wyoming Beef Council (WBC) in August 2013. The position is elected by the WBC members, who help ensure that a portion of checkoff dollars collected in Wyoming are committed to foreign market development.
There are two avenues of checkoff investment in international markets. The first is through contributions earmarked for the National Cattlemen’s Beef Association’s (NCBA) Joint International Markets Committee, and the second is through contributions provided as dues to USMEF as a subcontractor to the beef checkoff. Wyoming utilizes the second option to maximize our voice. While NCBA International Marketing Committee dollars are ultimately invested in USMEF programs, direct dues contributions allow Wyoming its own representative on the USMEF Board of Directors.
In addition, the WBC has also contracted directly with USMEF to partner on direct-to-consumer marketing programs such as the Yakiniku project conducted last fall, which reached more than 408,000 Japanese consumers.
Checkoff dollars are a critical part of the funding mix that enables USMEF to represent U.S. red meat in the global marketplace. Funds are received from the beef checkoff and also from pork, soybean and grain checkoffs. These monies are matched dollar-for-dollar by USDA Market Access Emerging Market and Foreign Market Development programs. In fact, government programs constitute almost 40 percent of USMEF’s total funding and help to afford many international offices along with feet-on-the-street in key markets. USMEF further stretches buying power by combining financial resources with third-party contributions from industry partners around the world, including retailers, food service outlets, importers, etc., to create an integrated, cost-effective approach to supporting U.S. red meat exports.
Like the two conferences before, this meeting featured many knowledgeable speakers. One thing that stands out in my mind is that developing new markets isn’t quite as easy as it sounds. We all know that market development is the way to export growth, but the details of being positioned to displace competition in established markets while defending market shares we’ve built over time is a complex matter.
In an international marketplace that is increasingly competitive, there is no room for guesswork. USMEF CEO Phil Seng said in his opening comments, “If you have a ‘hunch’ about what’s happening in a market, you don’t have enough information. So you go back to the customer and get the information you need. There are no hunches or guesses in marketing.”
The reality is that what matters to the consumer in Europe is different than China, which is different from Brazil and so forth. Based on each country’s culture, standard of living, political, religious, social and economic fabric, there is no “one size fits all.” Thankfully, I am comfortable with the level of expertise that USMEF offers. On the horizon, beef exports are positioned to increase by three percent in volume and 13 percent in value this year.
Examples of some of the challenges ahead were addressed by Sharon Bomer Lauritsen, assistant U.S. trade representative for agricultural affairs and commodity policy, who provided USMEF members with an update on Trans-Pacific Partnership (TPP) negotiations. While market access negotiations with Japan have proven difficult, the Office of the U.S. Trade Representative (USTR) remains committed to getting the best possible market access for a broad range of U.S. agricultural products, including beef muscle cuts. The U.S. has been involved in TPP for four years while Japan just joined a year ago and is working to overcome its protectionist tendencies. Progress is being made that seems slow to us but likely seems fast for Japan. Lauritsen also discussed the progress USTR has made in negotiations with TPP participants Vietnam and Malaysia.
Also of note, there are growing concerns over the European Union’s duty free high-quality beef quota, which has recently seen increased utilization by suppliers other than the United States, particularly Australia and Uruguay. This threatens the U.S. beef industry’s ability to continue expanding its exports to Europe. Lauritsen said USTR is working closely with USMEF “to ensure that it is U.S. exporters that get the benefits of this particular program.”
All in all, I believe it is the rich diversity of USMEF that really makes it an effective organization. Through representation from multiple checkoffs and other investors, we have the opportunity to see issues from different vantage points, make decisions and move forward together toward increasing profitability for the grassroots producer.