February 13, 2013
 

US export experts discuss 2013 priorities for livestock, grains
 

A panel of export leaders discussed their 2013 priorities for US meat and grains during the Corn/Soy/Pork Expo held in Wisconsin Dells at the Kalahari Resort last week.

Including in the panel are Tom Sleight, CEO, US Grains Council; Jim Sutter, CEO, US Soy Export Council; and John Hinners, assistant vice president, industry relations, US Meat Export Federation (USMEF).

Overseas customers have been padding the pockets for US livestock producers. With 17 offices around the world, USMEF focuses on promoting US beef, pork and lamb in over 103 different countries. According to Hinners, one out of every four hogs that we raise is destined for the international market, and that equates to an additional value of US$55 per hog.

One of the greatest opportunities for adding value to meat comes from the foreign taste for variety meats and under-utilised cuts that have little demand in the US, such as tongue. Hinners estimates this additional value on a beef carcass at US$215. Following last week's announcement that Japan would begin importing US cattle less than 30 months of age, Hinners is optimistic for what the future holds.

Further, he believes China will continue to be a great market for pork and other commodities. "With 1.3 billion people, they can consume a lot of product," he added.

Sleight reinforced China's position. "Countries like China are seeing growth of global consumerism that everyone in this room is going to benefit from," he said, noting that over the past 30 years, meat consumption has increased by four times and milk by seven times. He credits export programmes with creating this demand, which he believes we are just tapping into. The potential is demonstrated by the growth of China's largest fast food purveyor, KFC, which builds a new restaurant in the country every 13 hours.

The US Soy Export Council efforts are being concentrated on continuing to build an international preference for the quality and consistency of our domestic product. As Sutter points out, China is a key market for US soy with its growing human population and livestock industry, consuming roughly 20% of the crop. While these export groups have funnelled their energy into establishing and growing markets in foreign countries, a few hang-ups back on the home front have overseas customers concerned. According to the leadership of the US livestock and grain export programmes, the farm bill extension has cast doubt in the minds of foreign markets, leaving key trade countries questioning whether or not American farmers will be able to deliver their highly demanded supplies in 2013 and beyond.

Granting that 2012 turned out to be a "pretty interesting" year for the US corn sector, the short crop sparked initial concern over supply. Adding to that, foreign market development and access programmes were not authorised when the farm bill went away on September 30. Hinners emphasised that a farm bill is "critical" for the USMEF. "About half of our dollars come from USDA, whether through market access programmes or commodity checkoffs," he noted. "What we are going to do right now is look at our programme in the next six months and prioritise."

Sutter also voiced his concerns. "We are at a big shortfall," he noted. While he initially believed the farm bill extension would remove some of the uncertainty, the lack of funding to back export programmes only meant that there were "no dollars in the checking account. We are still in an uncertain situation," he added.

The three leaders encouraged producers to contact their representatives and ask them for support for export and foreign market programmes. Another persistent issue among the exporting groups is the transportation system. Sleight fears that the lack of improvements could lead to the loss of the US' competitive advantage in the world market.

Sutter echoed his concerns. Though there has not been as much recent talk about major problems at ports, he warned producers not to get "lulled into a false sense of security." The short corn crop has meant for less Mississippi River traffic, while soy exports are at their highest pace in the last four years. When the drought is over and the corn supply back up, there will be problems on the river and potentially problems for foreign customers. Despite the looming dark cloud, Hinners reminded producers that we must instil confidence to these consumers in order to maintain our position as a reliable supplier.