Rising Economies and Incomes Increase Opportunities For U.S. Meat Exports

As international economies and incomes rise, so do opportunities for U.S. beef and pork producers to export red meat. However, the success of those opportunities is dependent on market access and understanding international culture.

That was the message U.S. Meat Export Federation (USMEF) President and CEO Phil Seng delivered Thursday to members attending the USMEF board of directors meeting in Albuquerque.

The past year has been one of the most difficult USMEF and beef exporters have faced as many markets closed to U.S. beef due to a single case of BSE reported in Washington state in December 2003.

However, the shared vision reached between the United States and Japan in late October is the first step in reopening the Japan market as well as related markets.

“The countries we need to have meaningful access in are Japan, Korea, Taiwan, Egypt, Hong Kong and China. If we are successful in those top countries, we will be 98 percent there in reopening markets to U.S. beef,” Seng said.

For U.S. beef and pork exporters to find success in international markets, they must be cognizant of differences in politics, culture and trade. USMEF specializes in understanding the economy, politics, culture and population of each market, making that information to members wanting to export to different countries.

Mexico has become the largest current and expanding market for U.S. beef exports since Japan stopped importing U.S. beef last December. The United States holds an 86 percent share of the beef import market in Mexico and an 80 percent share of the pork import market. With Mexico’s population and per capita rising combined with the reduction of land available for livestock and agriculture, red meat imports are expected to rise.

USMEF plans to capitalize by educating to retailers and consumers that U.S. beef is wholesome, safe and nutritious. An example of this is the Como Como campaign that asks the question, “How do I eat?” and answers by showing a middle-class family enjoying U.S. beef for dinner. This campaign emphasizes U.S. beef is healthy, tasty and fresh.

Another campaign called El Cerdo es Bueno, which means Pork is Good, emphasizes U.S. pork is healthy and safe for use in everyday family recipes. The campaign includes a brochure distributed at retail stores featuring popular and traditional Mexican dishes prepared with U.S. pork.

Additionally, USMEF sponsors a chef competition each year in effort to teach the HRI sector of less expensive U.S. beef and pork cuts and how to incorporate them to their meal plans. The competition is a must for serious chefs and winning is an honor among members in the HRI industry.

Mexico is currently investigating a pork anti-dumping case dealing with hams and picnics, which should be resolved in early 2005.

Although Mexico is now the largest importer of U.S. beef, Japan imports the most U.S. pork. Globally, pork trade is up 11 percent, but U.S. pork trade is up 33 percent or three times the worldwide average. Japan is experiencing economic growth, is highly-populated and is experiencing a 1 percent decline each year in meat production.

USMEF has been active in promoting pork to Japanese consumers using a Pork Caravan that travels to retail stores to promote the quality, taste and safety of U.S. pork. The caravan is located outside the retail store and provides educational materials and U.S. pork samples to consumers. Stores visited by the caravan increased sales up to five times than stores not visited by the caravan.

Beef producers are anxiously waiting for the Japanese market to reopen to U.S. beef most likely next spring. It is estimated it will take two years for exports to return to pre-BSE levels. USMEF has provided scientific information to aid in trade negotiations and will work in restoring consumer confidence in U.S. beef.

As Japan reopens its market to U.S. beef other countries, such as Taiwan and Korea, will soon follow. Taiwan announced on October 20 conditions of reopening its market, so the market should open soon.

Korea beef imports are expected to reach 70 percent of pre-BSE levels by 2005. Due to increasing demands by other markets, availability will be a key issue when the market does open. Korea has decreased its domestic meat production, but increased in meat consumption. More Koreans are dining out at Western restaurants, such as TGI Friday’s and Outback Steakhouse, increasing the demand for U.S. meat.

Animal diseases, such as BSE and Avian influenza, have pushed pork consumption worldwide. In Korea, exports of U.S. pork are up by 57 percent. The U.S. has 55 percent of the pork import market share in Taiwan, which is appealing to U.S. pork producers since Taiwan imports variety meats like brisket bones, bung, feet and kidneys for traditional dishes. These variety meats have a higher value when exported since they are unpopular in the United States.

Avian influenza and SARS have also impacted meat consumption in China making consumers safety conscious. USMEF takes an active role in educating the decision makers in the safety certification process and is also working to reopen the market to U.S. beef.

Strong economic growth, large populations and a decline in domestic pork production has increased prices for pork and beef in China. USMEF targets HRI retailers by promoting U.S. pork for use in traditional dishes, such as pork butt in hot pot, a popular winter dish.

USMEF is also regarding highly the European Union for meat exports since it is the world’s most affluent trading block and has a dwindling beef supply due to domestic agriculture policy reform driving down production and loss of consumer confidence due to BSE. The Eruopean Union is dependent on imports since domestic beef deficit is estimated at 400-450,000 metirc tons this year.

USMEF takes an active role to increase United States supply of beef eligible for export to the European Untion. Currently, only six United States plants are eligible to export beef to the European Union, but USMEF is working on increasing that number.

USMEF establishes distribution links for U.S. beef to develop product loyalty and consumer confidence in addition to expanding U.S. beef on HRI outlet menus and as the preferred meat product from European Union consumers.

Additionally, U.S. pork has increased by 55 percent this past year with exports to Romania expected to drive up that number in the current year.

Meanwhile, in Russia, the story is much the same with the economy growing and the HRI industry fueling U.S. meat imports. Russia has implemented a quota system to control exports, but U.S. meat has enjoyed a favorable quota in the market, which is expected to increase this year. This is partially due to one-third of Russian meat being imported in addition to domestic meat production declining. Additionally, large retailers like Wal-Mart are gaining market share in Russia, creating inroads for U.S. meat imports, which USMEF takes a role in expanding.

In Russia, U.S. beef exports are believed to regain pre-BSE levels by 2006, mostly fueled by the HRI sector that markets the tastiness and quality of U.S. marbled beef. Additionally, U.S. pork is expected to expand into next year especially since it has a favorable position in the Russian quota system and the consumer demand for muscle cuts is on the rise.

Another area that is experiencing economic expansion and rising per capita income is the Middle East. Driven by the oil industry, the six Middle East Gulf states have the world’s highest per capita incomes and population growth rates. The Middle East imports roughly 90 percent of the beef it consumes, making it a highly attractive market for U.S. meat exporters.

USMEF is educating importers on the availability and safety of U.S. beef in addition to developing relationships with vendors and promoting U.S. beef as a premier source of beef to consumers.

Although many markets are still closed to U.S. beef, USMEF is helping to open those markets and continues to identify opportune markets such as the European Union and the Middle East. With trade expecting to grow by worldwide in addition to countries experiencing economic growth and increases in per capita income, it means more opportunities for U.S meat exporters.