In late 1997, South Korea was swept up in the Asian currency crisis that bega...

In late 1997, South Korea was swept up in the Asian currency crisis that began in Thailand and threatened to plunge many Asian countries into economic turmoil. U.S. beef (including variety meat) exports plunged from 95,404 metric tons (mt) in 1997 to 58,272 mt in 1998, despite the long-awaited market liberalization (complete liberalization was on Jan. 1, 2001). U.S. pork (including variety meat) exports fell similarly from 11,550 mt in 1997 to 9,918 mt in 1998.

The depreciation of the Korean won severely eroded purchasing power, squeezed margins and increased competition among importers, distributors, and retail outlets and restaurants. Worse, an E. coli 0157:H7 scare in September 1997 hit beef in particular (though beef was not the cause) prior to the economic downturn.

In response, U.S. Meat Export Federation (USMEF) strove to diversify the mix of U.S. beef and pork cuts bought by Korean retailers and restaurants and labored to promote a new item in Korea — U.S. chilled beef. In promoting cuts little utilized in the United States and little understood in Korea, USMEF used its highly-qualified staff and its new, modern, Meat Education and Research Center (MERC) to develop retailers' handling and merchandising skills for chilled U.S. beef. The MERC trains retail and restaurant personnel how to buy existing, cheaper U.S. beef and pork cuts and how best to cut and prepare them to Korean specifications and thus satisfy Korean customers.

The South Korean economy is now in recovery — 6.2 percent growth in 2002 and an expected 4-5 percent growth this year — and the U.S. red meat industry is breaking records for both pork and beef exports to Korea. The United States exported 237,982 mt of beef and beef variety meat to South Korea in 2002, a 59 percent increase over 2001. In value, beef exports to South Korea climbed 66 percent to $648.3 million. U.S. pork and pork variety meat exports to South Korea totaled 23,776 mt, a 61 percent increase over 2001. In value, pork exports to South Korea climbed 62 percent to $40.9 million.

The Foreign Agricultural Service (FAS) forecasts that Korean consumer spending will remain steady, again driving growth in demand for imports from the United States, including meat and processed meat products. Unemployment and inflation are expected to be low, and wages are increasing.

The outlook for 2003 is dampened somewhat by the impending war in Iraq and a likely decline in consumer spending. A new president — Roh Moo-Hyun — was sworn into office on February 25, and there is some fear that the newly elected incoming government will institute destabilizing reform policies, but little dramatic change is predicted.

The U.S. Meat Export Federation is the trade association responsible for developing international markets for the U.S. red meat industry and is funded by USDA, exporting companies, and the beef, pork, corn, sorghum and soybean checkoff programs.

-- USMEF --