| Subject: | Impact and opportunities for U.S. exporters resulting from th...

 

Subject:

Impact and opportunities for U.S. exporters resulting from the widening impact of foot-and-mouth (FMD) disease in the EU.

Primary Target Markets:

Korea, Russia

Secondary Target Markets:

EU countries, U.S., CEEC, China and, as of April 23, Japan

Summary:

As of 5/01/01: Confirmed FMD cases in Great Britain totaled 1,522, experts expect the number to go higher. Netherlands has 26; Northern Ireland has four; Irish Republic has one; France has two. In the UK, 2,349,000 animals have been slaughtered, 112,000 animals are awaiting slaughter. Around 4,000 farmers have also applied to enter an additional 1,270,000 animals into the foot-and-mouth Welfare Disposal Scheme by the Intervention Board. For the latest numbers, go to http://news.bbc.co.uk/
hi/english/in_depth/uk/2001/foot_and_mouth/.

 

Since 1997, average annual exports of pork and pork variety meats from the EU were 912,961 and 206,585 metric tons respectively.  Japan, Russia, U.S. and Korea were the top four importers of pork, accounting for 70 percent of exports.  Hong Kong, Russia, China and Czech Republic were the top four importers of pork variety meats, accounting for 70 percent of exports.  Most countries have partial bans on the import of meat from EU countries with confirmed cases of FMD.  Fourteen countries continue to have full bans prohibiting the import of meat products from any EU country; only Japan has modified its ban. See the tables below for further details.

 

Countries with full bans on all EU meat: Australia, Bulgaria, Canada, China (does not include Hong Kong), Hungary, Indonesia, Mexico, New Zealand, Norway, Poland, Russia, Slovakia, South Korea and USA.

 

Japan on April 23 lifted its ban of imports from Finland, Sweden, Austria and Denmark, it's largest supplier. Its ban of products from other EU countries remains in effect.

Beef exports from the EU were already banned by most countries, see http://www.usmef.org/commentary/news/
POV_BSE_032701.htm for more information.The major exception to the global BSE bans was Russia as they only implemented bans on EU regions with confirmed BSE outbreaks rather than banning all EU beef.  Russia’s recent ban of all EU meats, however, expands the beef export potential by an estimated 250,000 mt.

 

Situation Analysis:

Current EU FMD status: Active outbreaks in U.K. Confirmed outbreaks in Northern Ireland, Irish Republic, France and Netherlands. As a result, the U.S., Korea, Russia and several other countries have total bans in place affecting all meat and livestock trade with the EU; only Japan has modified its ban. Bans are temporary – typically two weeks – but will continue in place as long as outbreaks occur. Countries with confirmed outbreaks are likely to be off the market for at least six months. “Regionalization” – where isolated and contained cases of FMD may be segregated from FMD-free areas of a country, thus allowing trade from FMD-free zones – is possible when health officials are satisfied that cases in continental Europe are contained. On March 23, the Dutch won the support of EU ag ministers to allow vaccination efforts to control the spread of the virus.  A successful eradication and vaccination program by stricken countries could allow large EU exporters, such as Denmark, to isolate themselves and resume exports.

Primary market situation: Denmark is the number-one pork exporter to Japan, having shipped 212,162 of total imports of 650,818 tons in calendar year 2000. Other European suppliers sent about 61,960 metric tons of pork to Japan in 2000.  The U.S. was the No. 2 supplier, exporting 209,588 mt in 2000. According to trade sources in Japan, Japanese importers see Canada as offering the greatest short term potential to fill supply gaps. However, with the yen having depreciated approximately 15% over the last 6 months, and North American pork prices rising, it is difficult to predict how much U.S. and Canadian suppliers would fill in any shortfall that develops. Japan's lifting of its ban against its primary trading partner, Denmark, will limit North American pork export opportunities.

Korea imported just over 98,000 mt of pork from Europe (including Hungary) in 2000 out of a total of 138,998 mt. Since Korea favors the European specification of single ribbed pork bellies, and North American belly prices are high, it is likely total Korean pork belly imports will fall in 2001 if the bans remain in effect.

 

In 2000, Russia imported 175,000 mt of pork and 40,000 mt of pork variety meats, in addition to 178,000 mt of beef from the EU.  For 2001, USDA expects Russian pork imports to remain steady and beef imports to rise 75 percent.

Key Issues:

Supplies: The four EU countries with confirmed outbreaks of FMD exported 1,451,520 mt of pork and 251,842 of pork variety meats in 2000.  On average, these countries export 78 percent of the pork and 50 percent of the variety meats to other EU countries.  The balance was exported to countries outside the EU.  See the tables below for more details about the pork exports from these countries.

 

Specifications: Unique product specifications may be preferred in some Primary and Secondary target markets. For example, the Japan and Korea markets may prefer single-rib pork bellies. You should contact USMEF International offices for specification details.

 

To export to EU countries:

The following steps must be taken for plants to be approved for exports to the EU:

1. Make sure that your plant meets the EU requirements as written in the USDA FSIS Export Library. The export library website is www.fsis.usda.gov/ofo/export/explib.htm. If you have additional questions, please contact Dr. Larry Darr or Dr. Larry Lee at the FSIS Technical Services Center in Omaha at 402-221-7400.
2. When your plant is ready for inspection, you need to complete and submit FSIS Form 9080-3 and contact Drs. Darr or Lee to set up the inspection. The plant inspection can usually be done within a two-week time frame. If your plant passes inspection, the FSIS Technical Services Center in Omaha will forward the information to FSIS in Washington, D.C.
3. FSIS in Washington, D.C. will send the information to the EU Commission within three to five working days. The EU Commission has 20 days to respond to the request.
4. When the Commission lists the plant in the EU, the plant can officially begin to export product to the EU. The EU Commission will also notify FSIS of plant approvals.

In addition to plant approval, cattle must come from producers approved for the Non-Hormone Treated Cattle Program. The website for AMS, Non-Hormone Treated Cattle Program, is www.ams.usda.gov/lsg/mgc/nhtc.htm. Pork for export to the EU must be from the approved list of pork producers in the Pork for the EU Program. The website for Pork For the European Union Program is also on the AMS website. If you would like to get additional producers on the lists or have any questions, Mark Bradley is the contact for both AMS programs, and his telephone number is 202-720-1124.

 

For information regarding the EU Additional Residue Program, contact Jim Weems at 806-763-1100.

 

For information regarding export requirements for other export markets, please see the USDA/FSIS Export Requirement Library.

 

U.S. Is FMD Free: The United States has been free of FMD since 1929. The U.S. Department of Agriculture, in cooperation with State and County veterinarians have advanced surveillance procedures in place. FMD is a notifiable disease and any FMD-like symptoms are thoroughly checked.

Other diseases that have similar symptoms to FMD include: vesicular stomatitis, bluetongue, bovine viral diarrhea, and foot rot in cattle, vesicular exanthema of swine, and swine vesicular disease. Whenever mouth or feet blisters or other typical signs are observed and reported, laboratory tests must be completed to determine whether the disease causing them is FMD.

 

For more information, go to http://beef.org/newsroom/FMD/fmdfaq.htm or http://www.aphis.usda.gov/oa/fmd/index.html for additional information.

Other Resources:

APHIS FMD resource: http://www.aphis.usda.gov/oa/fmd/index.html

FMD situation in Europe: http://news.bbc.co.uk/hi/english/world/europe/

newsid_1191000/1191046.stm

FMD Situation in the UK: http://www.maff.gov.uk/animalh/diseases/fmd/default.htm

Primary Contact(s):

Richard Ali, London, EU@usmef.org
Michael Zerr, Denver, mzerr@usmef.org
Lynn Heinze, Denver, http://www.usmef.org/commentary/news/WINDOWS/Temporary%20Internet%20Files/OLK7373/lheinze@usmef.org

Paul Clayton, Denver, http://www.usmef.org/commentary/news/WINDOWS/Temporary%20Internet%20Files/OLK7373/pclayton@usmef.org

Tom Lipetzky, Denver, http://www.usmef.org/commentary/news/WINDOWS/Temporary%20Internet%20Files/OLK7373/tlipetzky@usmef.org

Average Annual EU Exports of Pork and Pork Variety Meats

1997-2000, metric tons

 

Pork

Pork Variety Meats

Russia

274,419

42,853

Japan

217,214

6,270

Central & Eastern Europe

146,850

33,177

North America

79,082

7,612

South Korea

61,606

2,579

Hong Kong/China

44,015

88,871

ASEAN Region

19,904

5,674

Others

69,871

19,549

Totals

912,961

206,585

Exports of Pork and Pork Variety Meats from EU Countries with FMD

2000, metric tons

 

Total Exports

Intra-EU

External

Netherlands

845,953

662,026

183,927

United Kingdom

224,898

178,644

46,254

France

514,151

329,120

185,031

Ireland /1

118,360

93,653

24,707

Totals

1,703,362

1,263,442

439,920

/1 four-year average

Pork and Pork Variety Meat Export Trade Matrix for EU Countries with FMD

2000, metric tons

 

Russia

Japan

CEE

Korea

HK/PRC

ASEAN

Netherlands

27,542

10,975

32,938

16,965

64,536

9,327

United Kingdom

3,800

4,825

4,272

3,721

16,814

4,883

France

64,246

23,939

18,280

19,510

15,364

12,973

Ireland /1

2,618

10,395

842

736

2,865

177

Totals

98,206

50,134

56,332

40,931

99,580

27,360

/1 four-year average

Pork Import Trade Matrix for Selected Target Markets

2000, metric tons

 

Market Size

EU

US

Canada

Russia

350,000

175,000

70,000

10,000

Japan

650,818

274,122

209,588

111,166

South Korea

138,998

80,865

9,613

26,059

Poland

35,910

27,950

10

2,500

HK/China /1

198,937

52,372

6,171

9,190

Philippines

21,245

12,204

657

3,309

Singapore

27,694

21,149

321

713

/1 Based on Hong Kong imports, includes re-exports to Mainland China

Pork Variety Meat Import Trade Matrix for Selected Markets

2000, metric tons

 

Market Size

EU

US

Canada

Japan

12,560

5,165

3,279

3,687

South Korea

4,428

2,236

1,047

1,039

HK/China /1

205,738

131,817

38,423

24,402

Philippines

17,172

8,949

336

3,958

/1 Based on Hong Kong imports, includes re-exports to Mainland China