Beef export markets gain momentum in 2010
Greg Hanes of the U.S. Meat Export Federation (USMEF) describes Tokyo, Japan, the most populated city in the world, as developed and built up, with people all over the place.
“You can’t even see the horizon for the buildings. It’s like that for miles,” he says. “It’s interesting, because you see the differences from the U.S., but also the similarities, and one of those similarities is U.S. beef. What U.S. producers make is the best product in the world, and when people taste it, they appreciate it.”
USMEF is a non-profit organization that’s focused on adding value to and increasing exports of U.S. meat for the last 35 years. It’s network of international office staff is mostly composed of people who are native to their location and act as the eyes and ears of the area’s meat industry.
“From 2008 to 2018 meat consumption in the U.S. will go up five percent, and globally it will rise 15 percent,” comments Hanes. “That increase is almost 18.6 billion pounds, and just that increase is about three-quarters of what we produce right now. That’s a lot of beef to provide for the world.”
“The U.S. is a main supplier, and Brazil has traditionally been a main supplier but their supplies are going down. Australia is steady, but they can’t increase, either. The U.S. is on an upper trend again, and if we can get to where we were on pre-BSE levels we’ll be the preeminent supplier to the world,” says Hanes. “That’s the biggest concern right now – meat the supply for world demand.”
“Per capita consumption is also going up, and that’s something we need to take advantage of,” he adds.
Hanes calls 2009 the year of challenges, listing a global recession, access issues and negative consumer perceptions as the top barriers for U.S. beef.
“It was a tough year, but this year has started so much better, and 2010 is a year of opportunity for us,” he says. “While the U.S. really got nailed with the financial crisis, debt and the housing dilemma, Japan’s banks weren’t involved in the speculation, so their system was very strong and helped boost the rest of the world.”
He adds that Japanese consumers also don’t have the credit debt of U.S. consumers. “Even though their economies were hurt, they still have a lot in savings, so they’re watching their pennies but they’re still out there spending,” he says.
“New markets are open in Korea, and Taiwan has improved. In April Secretary Vilsack visited Japan and China with a new approach in negotiating trade, so things are starting to move up this year,” says Hanes. “In early June Walmart announced its first-quarter earnings, which were up 10 percent, and that’s a good sign. Of their earnings, only one percent came from domestic sales. The rest came internationally.”
“Before BSE, 2003 was a very good year, but not our best year. In 2008 we were steadily increasing before hitting a speed bump, and this year we expect to eclipse the 2008 numbers,” continues Hanes. “Already in the first three months of this year the value of products exported exceeds the total for 2003.”
Hanes says the unofficial weekly export statistics indicate that almost every market is up. “The only outlier is Mexico, because of their economy and issues with cheap chicken. But otherwise we’re already up 25 percent for the first half of the year.”
He notes a key thing to look at is that the U.S. does not export steaks and middle meats, or other meats commonly consumed here. “The products going overseas are the products we don’t want to eat, and that leads to carcass value maximization. We’re sending livers to Egypt, short ribs and chuck all over the place. Getting more value for these cuts brings real dollars back to the U.S. In a lot of cases the price we get internationally is more than double what we could get here.”
Just based on export value, in the first three months of 2010, those cuts added $125 per head, says Hanes. “In some cases one cut to one market has a huge impact. For example, short ribs shipped to Korea are hot, and that one cut adds $15 to every animal in the U.S.”
A key area of growth for U.S. exports is Asia. “Through the end of last month we were already up 42 percent in Asia, and the growth continues. Asia is such a key market, but it’s one of the areas with the biggest hurdles – consumer perception.”
USMEF has worked to reimage the whole industry with integrated marketing campaigns in Asia. “The key thing about these campaigns is that every country is so different, and they have to be very localized. We try to identify what the concerns are in the markets, who has the concerns, then create a synergetic strategy to target and address the concerns of consumers, and as their concerns change we adjust as well. That enables us to be tactful, and it helps us build the U.S. brand.”
Hanes says the key is to move everyone away from a negative attitude and to the tipping point of positive momentum growing toward acceptance and growth of U.S. beef.
“The Aussies are getting nervous, and we’re now on the offensive on these markets. Their reports say they’re losing a lot of value to strong competition from the U.S. Trust in the U.S. product is starting to really increase.”
Hanes notes the USMEF’s next target is Taiwan, which is now in a similar situation in reopening markets to bone-in beef that Korea experienced when it reopened markets to U.S. beef two years ago.
“The people of Taiwan felt their government was letting in unsafe products, and that gave U.S. beef a severe beating,” says Hanes. “This summer we’ll launch a campaign called ‘We Love U.S. Beef’ using characters with a very deep and positive meaning to the Chinese. From focus groups we know we already have a very positive image with that campaign, and we’re trying to get the images out to redo some of the negative public relations.”
“The focus of USMEF is to put U.S. beef on the world’s table, and that means putting Wyoming’s beef on the world’s table,” says Hanes. “You produce the best beef in the world, and that makes our job so much easier. When consumers in these markets try it, they can tell that it is the best product.”