U.S. red meat producers and Japanese importers are ready and waiting for a finalized trade deal.
American beef, pork, and grain producers were on the ground in Japan recently as part of the U.S. Meat Export Federation’s (USMEF’s) Heartland Team’s trip to Tokyo and Sendai, Sept. 1-7. While the point of the trip was consumer outreach and education about U.S. red meat, the recent announcement of an agreement in principle on a U.S.-Japan bilateral trade deal was still big news.
In a press call, held early Sept. 5, producers on the Heartland Team and USMEF officials talked Japanese trade. Though they couldn’t offer new details on the agreement in principle, they spoke about demand, the trade tone on the ground, and strategies to rebuild market share.
Speaking specifically of the announcement of the trade agreement in principle, Dan Halstrom, USMEF president and CEO, said that there was a lot of excitement.
“I have to tell you there’s a lot of enthusiasm with the customers in Japan about that,” he said. “We’re already talking with some of the major importers about how we can help them regain lost share. A lot of discussions in that direction. A lot of excitement here.”
He and others noted that the tariff situation U.S. beef and pork face has negatively impacted Japanese importers wanting to bring in the product.
“We’re operating at a disadvantage at the moment with 12 percent duty disadvantage to the U.S. [on beef] versus some of our key competitors like Australia, Canada, and Mexico. And also we’re at a disadvantage on the pork side.”
Speaking from the pork side, Dave Preisler, Minnesota Pork Board CEO, talked at length about the demand for U.S. grain-fed red meat in Japan.
“Over half the calories in Japan are imported, and that’s not going to change. In fact, that number might even become more. Why not have that come from, for our case, the upper Midwest in the form of red meat?” he asked.
“People here like meat,” he went on. “They have a tremendous demand for it plus we know that we can supply the kind of volume and quality that they’re demanding and we will do all we can to continue to ensure that we’re meeting that demand.”
During the press call, Halstrom gave an outline of strategies for rebuilding lost market share for U.S. beef and pork once the trade deal happens.
“We have different strategies with the different sectors—national retail versus regional retail versus food service—they all vary a little bit,” he explained. “Specifically, the sector that we’re most interested in is the chilled segment, the table meat market that goes out chilled.”
Table meat includes both beef and pork.
“I think the key point here is we have commitments from our major funding sources, both Checkoff as well as some of our government revenue, for this very purpose—to be ready when we’re on a level playing field in Japan to regain some of that lost share.”
Though no one quantified this lost market share during the press call, exports of U.S. beef and pork to Japan have fallen since the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP, successor to the Trans-Pacific Partnership) took effect Dec. 30, 2018 according to USDA data. Member countries, including U.S. red meat competitors, face lower tariffs than the U.S. making them more attractive sources of product.
Year-to-date (through July, most recent complete data), exports of beef and veal to Japan stand at 483.3 million pounds, down 6.4 percent, compared to the same time in 2018 before CPTPP took effect. For pork, the year-to-date export volume stands at 688.5 million pounds, down 3.5 percent.
Despite this, Halstrom said the outlook for trade to Japan looks good.
“Our assumption is, sometime in 2020, this agreement will hopefully be in place and we’ll be reaping the benefits of it. But, I think, in general, the U.S. is very well positioned from a supply standpoint. We have record production in beef and pork and are very well positioned to supply some of these shortfalls and increased protein demands around the world, not only in Japan. We’re feeling pretty positive about 2020 given the current state of the demand situation.”
Cevin Jones, Idaho cattle feeder and USMEF chair-elect, stressed the need to deal with the current tariff situation and optimism for the future.
“When we get back on a level playing field with tariffs, I think we can really still move the needle here.” — Kerry Halladay, WLJ editor