World Economy: Groups see grain, red meat export opportunity

In the last 50 years, meat consumption has increased tenfold in countries like South Korea. In 1970, residents there consumed slightly more than 11 pounds of meat protein a year, but today they are well above 100 pounds. 

“Their economy has grown to where they can afford to pay for product and its availability,” according to John Hinners, vice president of industry relations for the U.S. Meat Export Federation (USMEF). 

Hinners spoke about export opportunities for the U.S.

Emerging markets

Emerging markets like South Korea are important to U.S. agriculture because production in this country exceeds what it can consume. 

“According to CattleFax data, each of us would need to consume another 40 pounds of red meat each year just to keep up with our production,” Hinners says. 

Exports are also positive for U.S. grain producers. 

“Eleven percent of the value of a bushel of grain can be attributed to exports,” Hinners continues. 

In fact, the National Corn Growers Association is promoting the value of grain exported through beef and pork adds 39 cents a bushel to corn.

Chinese opportunity

Other countries are also seeking out the U.S. for meat and grains. 

“We have a tremendous opportunity for pork in China right now. They are a big pork eating country,” Hinners says. “But, our underlying success is in our ability to export variety meats to other countries that are willing to pay more for them than U.S. consumers.” 

In fact, more than 90 percent of pork tongue, heart, liver, kidney, stomach, bladder and uterus are currently exported to other countries as variety meats. Most of this product is shipped to countries in northern Asia and Mexico. 

Beef exports

Beef exports also experienced another record year in 2018, accounting for 11.1 percent of production and 13.5 percent after variety meat exports are added. The figures were up from 10.2 percent and 12.8 percent in 2017. 

From January to October 2018, the export value of a single beef carcass averaged $320.50 a head, which was up 15 percent from 2017. U.S. exports for beef and variety meats were $6.92billion from January through October of 2018, which was up 17 percent from the same period in 2017.

Hinners says the key is education in markets like South Korea, which has developed into a big market for U.S. beef. However, Hinners worries the U.S. will alienate these customers during trade talks. 

“If we continue to alienate our customers, they will look south to countries like Brazil and Mexico. It is concerning to me,” he explains.

Grains

Kim Atkins, who is vice president and COO for the U.S. Grains Council in Washington, D.C., also sees the potential for tremendous growth outside U.S. borders. Countries’ in Europe, Latin America, Asia, Africa and the Middle East have growing economies and will be looking for better products to feed their populations. 

The mission of the U.S. Grains Council is to develop markets, enable trade and improve lives, Atkins says, noting, “Our theme is, when trade works, the world wins.” 

Atkins says Mexico, Japan, South Korea, Colombia and Peru are the top U.S. markets for grain exports. 

“In four out of five of those countries, we have strong free trade agreements in place, which helps,” she explains. “Good trade policies and a strong marketing program are also important. It also helps that the U.S. has been a top corn producer throughout history.”

New challenges

Like Hinners, Atkins says the U.S. has to be diligent, staying on top of its game to retain these valuable export markets. 

“Our top competitors for corn are Brazil, Argentina and the Ukraine. When the U.S. went through a drought back in 2012, our trade partners had to look to other areas for supply. Once we lose those customers, it is hard to get them back,” she says. 

“Failing to move forward on trade means falling behind, and the U.S. is significantly behind in the number of free trade agreements it has,” Atkins explains. “We have only had 20 trade agreements in place since World War II. We’re anxious for the administration to start playing offense and putting some free trade agreements in place.” 

“A lot of the successes we’ve had are from our in-country presence. That in-country presence allows us to be a facilitator of dialogue between the shipper, receiver, and sometimes the government, as well,” she explains.

“A good trade agreement is one that provides expanded opportunities for both sides. There will be winners or losers on both sides, but as long as both countries feel they come out as winners, I think the trade agreement is good,” Atkins says.

Hinners and Atkins presented during an Ag Spotlight presentation at the Colorado Farm Show, held in Greeley, Colo. in late January. 

Gayle Smith is a correspondent for the Wyoming Livestock Roundup. Send comments on this article to roundup@wylr.net.