At the National Cattlemen’s Beef Association annual summer business meeting, the U.S. Meat Export Federation (USMEF) reported their year-to-date success to the Checkoff Export Growth Committee. While overall exports are not as strong as 2019, they have held up on average and some markets are way ahead.
Dan Halstrom, USMEF CEO, reminded the committee of the range of activities USMEF conducts, in 19 global regions with 75 staffers. International marketing support includes technical services, issues management, trade access, in-market facilitation between buyers and sellers and hosting buyer teams showcasing American beef.
The various offices are always monitoring the strong competition from other countries. Our higher dollar products require more show and tell to demonstrate their value.
Committee members keep score sheets and grade each project on a 1-5 scale, rating how well each project’s results meet Long Range Plan goals. Both funding requests and results are carefully spelled out and monitored.
Halstrom said January through May, U.S. beef and beef variety meats were down 3 percent by volume and 5 percent by value. Volume exports to Japan were up 5 percent, flat to South Korea, up 15 percent to Canada and Mexico, and 2 percent up to Taiwan. Exports to China were down 5 percent and 25 percent to the Middle East.
Exports by value were up 2 percent to Japan, 3 percent to Mexico and 16 percent to Canada. They were down 3 percent to South Korea, and 4 percent to China.
Halstrom emphasized that of the $8 billion in total exports, $1 billion was from variety meats. Some countries and cultures provide a market that wouldn’t otherwise exist, while others provide premium value. Things like tongues, lips, tripe and livers would go into pet food without our export markets. Variety meats alone account for 27 lbs./hd and $37 of added value.
The share of primal muscle cuts absorbed, supported or boosted by exports is illuminating. Exports account for 95 percent of our short plate, 85 percent of short ribs, 35 percent of outside skirt, 31 percent of chuck shoulder clod and 15-20 percent of other chuck cuts. Perhaps most critical is the 48 percent of gooseneck rounds exported, Halstrom said. Exports aren’t as critical to higher value cuts, like heavy boneless ribeyes at 8 percent, strip loins at 7 percent and top butt at 6 percent.
The following are just tiny highlights of a half dozen presentations by regional staffers.
The Japan-U.S. agreement being implemented in 2020 is the biggest deal in years. Japan’s $2 billion market was our largest in 2019, even with a 13 percent tariff disadvantage to competitors. This year puts us on the same tariff playing field and even with the COVID-19 problems, both volume especially and value are up this year.
The U.S.-Mexico-Canada Agreement (USMCA) didn’t really change trade with Mexico, except removing uncertainty has boosted the demand for U.S. beef and variety meats.
The European Union (EU) actual market for U.S. beef changed constantly in recent years, with the non-hormone treated cattle quota changing and usually too low for the U.S. beef available. With a firm quota now again established, this market should grow.
The COVID-19 effect on global markets varies by region. South and Central America, Africa, the Middle East and India are in relative shutdown now. The U.S., the EU, South Korea and Malaysia are in relatively the same stage, with some opening up. China, Hong Kong, Taiwan and Vietnam are further along in recovery stages than the West. Japan has been ahead but is now dealing with spikes in urban areas like Tokyo. Japan has only had 39,000 cases and 1,000 deaths, with a population of 125 million.
U.S. market share in Japan has grown to 46 percent vs. 45.5 percent for Australia.
The political atmosphere in China and Hong Kong is fluid and leaning to restrictions. But supply and demand favor U.S. beef, given the Phase One deal just kicking in in March, and the competition mostly grass-fed beef. Sam’s Club in China sold 1,700 metric tons in May, the highest since 2003. The outlook is very good for all types of U.S beef, barring more political restrictions.
South Korea’s market hit $1.7 billion in 2019, with demand for quality beef increasing. The country is more advanced in ecommerce, with projections of 40 percent market share by 2024 vs. 4 percent for America.
Lines to get into Costco Korea have extended to three hours. The chain has been happy with U.S. beef, going 100 percent U.S. beef in 2019.
The pandemic has forced suppliers to really boost ecommerce, home meal replacement boxes and takeout in countries where people eat out more than cook, or normally food shop every day. — Steve Dittmer, WLJ columnist
(Steve Dittmer is the author of the Agribusiness Freedom Foundation newsletter.)
