Conference features global export market perspectivesWritten by Christy Martinez
Denver, Colo. – “Today we have to start looking at our industry in a global context and understand how we relate and how we’re considered by our competitors and our markets.”
That was the opening statement made by Phil Seng of the U.S. Meat Export Federation at the 2010 International Livestock Congress held in conjunction with the National Western Stock Show in Denver, Colo.
“The U.S. red meat industry is very highly regarded and has been successful over the years, and we export to almost 100 countries today,” he continued. “But today it’s not just the quality of the product that sells itself, but the story behind it and that’s becoming more important.”
The U.S. can produce everything its people can consume, while Japan can only produce 50 percent of its meat and Hong Kong imports 90 percent of its caloric intake. That puts the U.S. in an ideal position for exports, provided it can produce the variety of products unique to and specified by other countries.
Richard Brown of GIRA Euroconsulting in France said the U.S. needs to be “incredibly careful to understand the complexity of different markets,” because it’s not just one big global market.
Brown said a 20 percent volume growth of meat consumption in the world is expected in the period from 2005 to 2015, and that it’s “phenomenally important” that over half of that extra meat will be consumed in China.
He continued that the global meat market outlook is the most optimistic it could be for beef. “Trade will grow, and it’s Brazil that’s the big winner in world meat trade.”
He said it’s “relatively marvelous” that Brazil’s meat trade, especially pork exports, grew as much as it did from 2002 to 2005, considering their lack of market access. “They don’t have many of the best markets in the world open to their pork,” he noted.
“The key thing for growth in the future and exploitation of agribusiness potential is market access and the ability to respond to what customers want,” said Brown. He added that care should also be taken when exporting to not undermine the producers in the domestic markets into which meat products are being exported.
However good export markets looked several years ago, Brown said that was before the “new world” of 2007 and 2008 and the economic challenges worldwide.
“It’s interesting to understand the implications on meat demand in economic crisis,” said Brown. “As a simple farmer from the south of England, I don’t believe that economies in U.S. and in Europe will recover from the shock of what happened last year very quickly at all.”
“If you go off to China and India, their economies somehow managed to shrug off the effects of America and Europe and keep going with export markets. They still record and produce the fantastic growth rates, which is why the world figure is very good,” said Brown.
But in the rest of the world, Brown said consumers everywhere traded down, both in quality and price, and that was within and between species.
He added that the return to a weaker U.S. dollar is a “significant advantage” to U.S. producers, and he said it will continue to be weak in years to come because of the various economic problems in the U.S. government.
Relating to feed prices, Brown said, “We are going into a long-term environment where feed will be more expensive. While that’s not an advantage to the beef industry compared to poultry, it is an advantage to you in the U.S. because you’re jolly good at producing beef. You do it well and efficiently and have a scale of operation more efficient than other people.”
“Never underestimate the importance of animal diseases to meat markets,” he added. “If you reflect upon 2009, it was a sheltered year and comparatively normal. The thing we’re quite worried about for this year is African swine flu. It has the potential to be quite disruptive to Russian pig production, and possibly production in the EU.”
Being from the UK, Brown said he’s had sadness for very nearly 20 years with BSE. “I had three cases on my farm in 1991. I can sadly say that on my farm I’ve had as many BSE cases as you’ve had in your country, which is a dramatic piece of perspective, and it’s unbelievable how expensive it’s been to deal with.”
He said he’s also been through the trauma of foot and mouth disease twice, which is “not the slightest bit amusing for anybody.” He adds it was a deeply troubling time and seriously disruptive and expensive for farmers to deal with.
“That was deeply demoralizing and incredibly expensive with a result in export markets being closed,” he went on. “My country’s a big importer, but not having access to exports is like keeping the lid on a pressure cooker. It’s unbelievably important to have good systems that work and farmers that understand the importance of them and don’t hide things.”
Regarding bovine tuberculosis, Brown said badgers in the UK are heavily infected with TB and they spread it amongst cattle farms. “The government’s spending $150 million a year, and achieving absolutely nothing,” he explained. “Which is extremely annoying and 40,000 cattle a year are being destroyed for TB. British farmers aren’t optimistic for the future because of cumulative issues like that, and a government that doesn’t support us.”
Moving on to political developments that will impact global beef trade, Brown said, “Absolutely do not underestimate the importance of the Copenhagen Climate Change Summit. There was a disappointing outcome that presents a serious challenge to the ruminant industry regarding the impact of livestock on the environment.”
Brown said the “Less Meat, Less Heat” slogan needs to be taken seriously. “That’s a powerful statement that resonates with consumers in many parts of the world,” he said.
However bad global economics were in 2009, world meat consumption only declined a fraction, with expectations of one percent growth in 2010. “That’s not bad going in a bad economic climate,” said Brown.