What is in this article?:
- Easing restrictions on beef imports to Japan will be good for U.S. beef industry.
- Global beef supply in 2011 was really tight.
- U.S. beef remains a bargain.
Erin Borror, center, U.S. Meat Export Federation, chats with Michael Genho, right, and Brad Williams during a break at the recent Beef Financial Management Seminar in Amarillo.
China market is closed
She said China currently has “record high beef prices.” That market, she added, offers potential “for steady growth and a huge opportunity,” but remains closed to U.S. exports. The European Union also offers increased market potential for U.S. beef.
Japan also offers opportunities with relaxed trade restrictions. “We hope to see increased access to Japanese markets early next year,” Borror said.
Currently, Japan allows only whole-muscle cuts from U.S. cattle that are 20 months old or younger. That’s a holdover restriction from the 2003 BSE episode, after which Japan banned all U.S. beef imports. The 20-months-or-less restriction is a moderation of that ban and further loosening of the restriction is expected in 2013.
She refers to a proposal, LT30 (less than 30), which will allow U.S. beef imports from cattle less than 30 months old into Japan.
Before LT30, the United States could send in only a limited supply of beef; supply was inconsistent; and price was high. “After LT30, more than 95 percent of fat cattle are available for export into Japan,” Borror said. Supply will be consistent by season and price will be competitive with other Asian countries. The Japanese market also gets increased supplies of thin cuts, chucks and variety meats, higher grade beef and “branded US beef.”
Borror says approval of this new policy would be a huge win for U.S. beef.
Russia’s entry into the World Trade Organization also holds promise for U.S. beef exports. Borror says U.S. beef quota into Russia would increase to 60,000 metric tons, up from 41,000 in 2011.
Educational efforts are also underway to teach Russians about high quality beef, she said. “Russia offers a significant growth potential.”
She discussed Mexico trade and noted that imports of Mexican feeder cattle are up 20 percent. U.S. imports of Mexican beef (through July) are up 47 percent. “Exports to Mexico are down 17 percent. U.S. exports of pork and poultry to Mexico are both up—13 percent and 14 percent, respectively.
Hurdles to increased beef export remain. “Indonesia offers huge export potential, but that market is closed. Consumption is low.”
She said continued lack of access to China remains a challenge as does unrest in the Middle East.
Taiwan has implemented maximum residual levels of ractopamine (used as growth promoter) as a science-based process. The Korean free trade agreement offers promise, but “Korea has a large domestic beef production anticipated for this year and next year.”
Drought and further liquidation of the U.S. cattle herd poses hardship for the beef industry. “Larger beef supplies in Australia and Brazil might weigh on the market, but global supplies are still relatively tight,” Borror said.
U.S. beef export is expected to be off by 7 percent by the end of the year, she added, “but we expect value to increase by 13 percent in 2013, driven by Japan. We see a big potential to work our way back into the Japanese and Korean markets.”
Japan also may join the Trans-Pacific Partnership, which could improve U.S. agriculture export potential. “We also need expanded access to Hong Kong.
“Exports are important to our industry,” she said. “For one thing, exports maximize carcass value because we export some of the lower value cuts. The world needs high quality beef. USMEF will continue to market high quality U.S. beef and we must keep differentiating, especially with higher prices.”