U.S. Lamb Needs Access to Japan, Other Key Markets
Much of this improvement has been driven by an increase in variety meat exports, which are very important for maximizing carcass value. But in order for U.S. lamb producers to derive the full benefits of the international marketplace, their high-value cuts must have access to key markets that are currently closed – including Japan, South Korea and Taiwan. Russia and the European Union also hold potential for U.S. lamb, but those markets are also closed.
Regaining access to Japan is the most immediate priority, explains Thad Lively, USMEF senior vice president for trade access. Japan has no domestic lamb industry, so U.S. lamb would compete only with imports from other sources. It was a top five market for U.S. lamb before closing in December 2003 as a result of the first BSE case detected in the U.S. cattle herd.
“Although the governments of the United States and Japan have successfully reached a series of agreements that restored access for 90 to 95 percent of our fed beef production, we are still not able to ship lamb to that market,” Lively said. “This is very unfortunate, and something we hope to turn around in the near future.”
Lively added that USMEF and the lamb industry are working with U.S. trade officials to make resumption of lamb exports to Japan a front-burner issue, and he hopes that Japan’s recent entry into the Trans-Pacific Partnership (TPP) negotiations will provide additional momentum.
“It certainly helps that the TPP negotiations will include a component that deals with many issues that fall outside the usual scope of tariffs and quotas,” Lively said. “And that specifically includes the type of animal health issues that have been blocking our lamb exports. The TPP talks could provide an additional push for lamb access that wouldn’t otherwise be there.”
Last year Japan imported nearly 17,000 mt of lamb valued at $126.4 million. This was down from 2011, when Japan imported a record $160 million and ranked as the world’s fourth-largest import market (behind the EU, the United States and China). Australia holds about two-thirds of the Japanese market, with New Zealand capturing about one-third along with a small volume from Iceland and Europe.
Taiwan was a top 10 lamb market in 2012, with imports of just under 15,000 mt valued at $68.7 million. Korea ranked in the top 15 with imports of 4,460 mt valued at $24 million. New Zealand holds about 60 percent of the Taiwanese market, with the remainder supplied by Australia. In Korea, Australia is the dominant provider with about 87 percent market share.
“Like Japan, South Korea and Taiwan are markets that hold excellent potential for U.S. lamb,” Lively said. “Not because we will move the kind of volume there that Australia and New Zealand provide, but because there is an opportunity for high-quality, grain-fed cuts that will command a premium.”
The EU is perennially the world’s largest lamb importer, with 2012 totals reaching 153,108 mt valued at $1.29 billion. Nearly 90 percent of the EU’s imports are supplied by New Zealand. Last year was Russia’s second-largest ever for lamb imports, with 9,482 mt valued at $51.2 million. Australia, New Zealand, Moldova and Uruguay were Russia’s main suppliers.
“There are no valid reasons for the EU and Russia to deny access for U.S. lamb, and their trading patterns suggest these are definitely markets worth pursuing,” Lively explained. “This is a part of the world, however, where we struggle to maintain meaningful market access for a number of proteins. So I would say our prospects for opening these markets are further into the future, but they are certainly potential targets for long-term export growth for U.S. lamb.”
(Editor’s note: Except for the U.S. export totals (USDA, compiled by USMEF), statistics are from the Global Trade Atlas and include lamb and mutton muscle cuts and variety meat.)