USMEF calls beef imports ‘mixed bag’ for 2013

Washington, D.C. – The U.S. market for meat exports was a “mixed bag” in the first quarter of 2013, commented U.S. Meat Export Federation (USMEF) President and CEO Phillip Seng during a media conference on May 17, though challenges were seen in several sectors.

“It is pretty obvious for our beef exports that there have been challenges,” he commented, “but for the most part, we are doing pretty well on the beef side. Our numbers are down four percent on volume and five percent on value.”

Despite challenges to market access in China, Saudi Arabia, Argentina and Australia, Seng noted that other markets have seen increases.

Asian markets

“When we take a look at Japan, we are up 80 percent in volume in March alone,” Seng said. “That has been significant.”

Despite concerns that the yen has weakened some in the past quarter, Japan’s nature as a trading country means that increased trade helps to stimulate their economy. 

“Even though the yen has weakened, Japan is a trading nation,” he continued. “As they trade more, it stimulates the economy, and we see this outweighing the basic disadvantage of the yen, because the market has more enthusiasm. This bodes well for beef and pork.”

At the same time, recent announcements of continuing developments in Japan mean more velocity of U.S. product going in.

“When we take a look at what is going on with their Prime Minister announcing stimulus programs bodes very well,” Seng explained. “They have an attitude that tomorrow will be better than yesterday.”

He also noted that in Korea, large volumes of inventory are present, resulting in a seven percent decline in volume of exports to the country. At the same time, a five percent increase in value was seen for exports to the country.

In Hong Kong, the value of beef exports increased 106 percent.

“We are doing very well when you look at those markets,” remarked Seng.

NAFTA countries

Seng noted that in the countries involved in the North American Free Trade Agreement (NAFTA), U.S. exports are doing well.

“We are up 20 percent in volume and 32 percent in value,” he said. “Canada is performing very, very well.”

In Mexico, USMEF Regional Director of Mexico and the Dominican Republic Chad Russell said beef has been down significantly in the first quarter.

“With the exception of 2011, beef has been trending downward since 2008,” Russell explained. “This is a result of the high price of U.S. beef.”

Mexico, he continued, is a price sensitive market and declines of 27 percent have been seen in the first quarter of 2013. 

“Mexicans love beef, but they can’t afford it,” he said.

Country of origin labeling is also a concern for Mexico and Canada.

Other countries of interest

For countries in the Middle East, John Brook, USMEF regional director of Europe, Russia and the Middle East, says, “The Middle East has seen good growth for U.S. exports. Things are going well in the oil producing countries.”

However, Saudi Arabia is still problematic, as the country closed beef imports from the U.S. after the bovine spongiform encephalopathy (BSE) incident last year.

“They closed with one incident of BSE, which is not understandable and unforgivable for a country like Saudi Arabia – a close ally. We hope the problem will be resolved,” said Brook.

Concerns over Egypt’s economy also present a problem for U.S. meat exports.

“We see some worrying news in continued political uncertainty,” said Brook. “The Egyptian pound has lost 20 percent against the U.S. dollar.”

However, beef liver and variety meats are a fundamental source of protein for the country, and price increases have not affected consumption to this point.

“We have also seen nice development in muscle cuts,” he added.

Trade agreements

Other encouraging prospects for export markets are the trade agreements that are developing, including the Trans-Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (T-TIP).

“Japan is a major player in Asian markets and is the world’s third largest economy,” commented Seng.

However, Japan’s involvement in the TPP doesn’t necessarily signal large gains in U.S. exports due to competition. Seng marked at least 20 competing pork suppliers and 10 competing beef suppliers.

“The TPP has also increased the interest of our competitors,” he added. “Our competitors are also very excited about the markets.”

The European free trade agreement, known as T-TIP, is also encouraging for export markets.

“We have monumental philosophical differences, but hopefully we can look for common ground and build from that,” said Seng. “We are not looking to identify differences and problems. When we find areas in common, we can move forward.”

However, Brook added that the European Union has been highly defensive in trade talks.

With a population of 500 million citizens and 27 countries in the European Union, they are a decided advantage for U.S. exports. 

Russian markets

With the close of Russian markets due to ractopamine challenges, impacts have been seen in both beef and pork markets. 

“The industry has been working hard with us,” commented Brook, “whereby companies that do want to deliver protein and beef in compliance with requirements can do so.”

The agreement, which is in the last stages of being finalized, would allow producers who do not utilize beta-agonists, such as ractopamine, in their product to export to Russia. Brook commented that a meeting between Russia’s veterinary services and the U.S. Food Safety Inspection Service is pending. 

“Russia has set a policy for self-sufficiency in food,” added Brook. “When we analyze the market situation in Russia, they have moved from about 60 percent self-sufficiency to as high as 65 percent.”

Regardless, he noted that the country still provides a valuable trading partner for a number of years.

Challenges in pork

“The pork markets are down 12 percent in volume and 11 percent in value,” said U.S. Meat Export Federation (USMEF) President and CEO Phillip Seng. “There are challenges around the pork complex.”

Japan, the leading market for pork, was down 12 percent by volume, and Chinese markets were down 10 percent. 

At the same time, markets in Colombia, Singapore and the Philippines did well in the beginning of 2013.

In Mexico, domestic pork slaughter increased by 15 percent. 

“The good news is the increase in slaughter of Mexican hogs is declining rapidly,” USMEF Regional Director of Mexico and the Dominican Republic Chad Russell commented. “If the trend was to continue, there would be fewer Mexican hogs, and opportunities for the U.S. would open.”

For more information and reports from the U.S. Meat Export Federation, visit usmef.org.

Saige Albert is managing editor of the Wyoming Livestock Roundup and can be reached at saige@wylr.net.