Beef export rebound continuesWritten by Jennifer Womack
According to Erin Daley, USMEF manager of research and analysis, growth in exports to Canada, Japan, Korea and the ASEAN (Association of Southeast Asian Nations) contributed to the overall increase despite some remaining market access issues and a three percent decline in exports to the largest market, Mexico. Beef plus beef variety meat exports to Mexico increased one percent in value to $1.185 billion but declined three percent in volume to 359,452 metric tons.
Exports to Canada increased 37 percent to 132,144 metric tons (291.3 million pounds) valued at $602 million, largely fueled by currency dynamics and the increase in live cattle imports from Canada.
Beef variety meat exports to the Middle East – primarily liver exports to Egypt – increased nine percent to 88,845 metric tons (195.8 million pounds). Beef (non-variety meats) exports to the Middle East increased four percent to 6,956 metric tons (15.3 million pounds), driven by 48 percent growth in exports to the United Arab Emirates.
Beef exports to Japan increased by 265 percent to 44,718 metric tons (98.6 million pounds) valued at nearly $230 million. The 20-month age limit applied to beef exports to Japan has restricted combined beef and variety meat exports to just 12 percent of 2003 export volume.
Although market access was limited to a strict boneless-under-30-month protocol for an intermittent five months during 2007, Korea was the fourth largest market for beef exports with 24,240 metric tons (53.4 million pounds) valued at $117.3 million. Those commenting at the recent NCBA convention appeared optimistic changes in leadership and positive public opinion will results in a reopening of that market in the near future.
Full reopening of Japan and Korea, according to NCBA Economist Gregg Doud, could make a significant difference for the American beef industry. “Japan and Korea fully open would add between $80 and $90 to the value of a fed steer. Not all that goes to the packer, not all goes to the feedlot and not all goes to the cow-calf guy, but $80 to $90 would go a long way towards healing everybody up.” Doud says the countries could mean an additional billion dollars each in exports. He says it’s enough to alter the low margins being predicted for the cow-calf sector in the year to come.
“Your government understands the importance of opening markets for U.S. beef,” said Richard Crowder, chief ag negotiator for the U.S. Trade Representative at the recent NCBA meeting in Reno. “We also appreciate your sense of urgency at opening/reopening these markets. It’s not a switch we can turn on or off and it’s important the markets be opened on commercially viable terms that will provide consistent and sustainable trade.”
Taiwan was the fifth largest market, with exports increasing six percent to 22,566 metric tons (49.7 million pounds) valued at $107 million.
Daley noted that the weak U.S. dollar continues to enhance the competitiveness of U.S. exports while high global protein prices and strong demand provide potential for high quality U.S. beef and pork exports. “Access to foreign markets is critical for the United States to take advantage of these unprecedented global opportunities this year,” she stated.
USMEF predicts the U.S. will see the largest growth in beef exports among its global competitors in the decade to come with an 88 percent increase from 2007. According to Daley, the bulk of the increase in U.S. exports is expected to come from the anticipated reopening of the beef market in South Korea and expanded access to the market in Japan.
With five more plants approved for export to Russia early February, Doud also sees opportunity in that market. South America is presently sending a vast amount of beef to Russian, but Doud believes the U.S. will make inroads on that market. “Russia is the second largest beef importer in the world,” says Doud.
He also sees opportunity in the European Union, now a net importer of beef. “For the first time,” he notes, “the U.S. will fill it’s import quota to the European Union this year.”
Looking back to 2003 when a BSE infectected cow cost the U.S. numerous export markets, Doud says the U.S. beef industry is stronger as a result. Aside from Japan, Korea and China he says, “Everywhere else, we are well above where we were in 2003.”
In a general sense Doud says, “There’s more demand for beef than we have beef in the world.”
Here at home, the USDA forecasts a 4.9 pound (retail weight) per capita decline in U.S. beef consumption from 2007 to 2017, with a 1.3 pound per capita decline during 2008. These estimates reflect tight beef supplies going forward, and also indicate that a supply constraint was used in USDA’s export forecast.