USMEF export outlook marked by momentum
The U.S. Meat Export Federation Strategic Planning Conference began this week in Tucson, Ariz., and president and CEO Dan Halstrom said he’s positive based on increased forecasted demand and momentum for exports. He said beef demand is forecasted at a 5 percent growth for 2020, and pork at 13 percent in 2020, both an increase from forecasted 2019 totals.
Japan, he said, is a market he’s optimistic about with the pending trade agreement with a speculated Jan. 1 implementation. He anticipates regaining market share in pork and beef in Japan, especially with the Australian beef herd experiencing low numbers, putting U.S. producers in a position to fulfill demand and regaining share.
Mexico, he said, is the top lamb and pork export market, as well as the third-largest beef export market, and accounts for $2.4 billion in sales. It’s important to note, he said, it is a different set of products compared to Asia from a carcass utilization standpoint.
Developing regions are key to export growth strategy, he said, and include Central and South America, Southeast Asia, Vietnam, the Philippines, and Africa, among others. These are regions that are experiencing growth and the ability to purchase cuts like beef liver, maximizing carcass value.
Joel Haggard, USMEF senior vice president, Asia Pacific, who is based in Hong Kong, said the impact of African swine fever on exports to China could grow much more dramatically without the 72 percent duty, compared to the 12 percent duty faced by competing exporters. Despite the duty he calls “punishing,” the U.S. has a 13 percent market share in recent months. Total meat and poultry import numbers released by China show 4.3 million metric tons, up from 3.2 million metric tons in 2018, signaling, he said, a struggle to fill demand. Since August, the pork price in China has increased 80 percent.
“It makes U.S. pork still viable even with the 72 percent duty but we’re the supplier of last resort because of that,” Haggard said.
That being said, Haggard said the U.S. is the supplier that could grow, with USMEF estimating supply allowing potential exports of 1.6 million tons of pork. In 2018, exports to China were 220,000 tons.
Beef is relegated to a market share below 1 percent, he said, due to the 47 percent duty and the challenges of meeting China’s zero tolerance requirements for synthetic hormone residue.
Jihae Yang, USMEF, Korea director, based in Seoul, said Korea is a competitive and favorable market for U.S. beef with demand growing and domestic production growing only slowly. Korean imports have an 18.7 percent tariff, about a 5 percent gap with Australian beef. Korea, a $1.2 billion export market, is the second-largest importer of U.S. beef. The U.S., she said, has a 52 percent market share with Australia having a 41 percent share. U.S. beef enjoys a 62 percent market share for chilled beef as retailers offer more U.S. chilled beef, preferring it over the more expensive and less consistent supply of Australian beef.
Cuts growing in popularity with Korean consumers include rib complex, short plate, brisket and clot. Demand for home meal replacements, she said, are growing, driven by convenience. Marketed in retail, online, and in the delivery sector, this is a developing and unique market for U.S. beef that is proving popular with Korean consumers. Priced at less than $10, it is below the cost of eating out and is meeting consumers’ desire for high quality meals.
U.S. chilled beef is capitalizing on fresh food home delivery services that, with improved distribution and packaging, Yang said are replacing the need for physical shopping. The chilled tomahawk steak is the signature item of Korea’s largest ecommerce platform.
Korean pork imports fell by 8 percent from January to August, though Korea is still the fourth-largest export destination. However, it is a 40 percent increase from 2017 as inventory is managed. U.S. market share is 35 percent and growing while European countries focus on the Chinese market, she said.
African swine fever, she said, has only been detected in border areas, serving as an illustration of the Korean government’s management success compared to other Asian countries. As of Nov. 5, there were 14 cases in domestic hogs and 20 in feral hogs. Only 1 percent of Korean hogs have been culled though producers said losses are totaling about $130 per head, mostly due to consumer reservations about safety in the domestic pork supply.
Gerardo Rodriguez, USMEF marketing director for Mexico, Central America and the Dominican Republic, said U.S. pork is rebounding in Mexico. Consumers there, he said, prefer bone-in ham but USMEF is trying to expand beyond the single cut by working with processors. Consistency and quality of U.S. pork is encouraging growth in other nearby countries.
Beef demand, he said, has been flat in Mexico though new cuts and products are seeing some growth in the northern part of the country. The Dominican Republic is the strongest market for beef in Central America where higher end cuts and lower value cuts are being utilized in food service.
A timeline for U.S. Mexico-Canada trade agreement is still unknown but Halstrom said timing is of the essence so the process isn’t sidelined by the election focus further into 2020.
“I know there’s a lot of people pushing hard to get the process initiated within the House of Representatives, and we would fall in that same boat that we’re in full support of getting that moving sooner rather than later,” he said. ❖
— Gabel is an assistant editor and reporter for The Fence Post. She can be reached at email@example.com or (970) 392-4410.