March 17, 2008

US could gain US$90/head for cattle if Japan, South Korean markets reopen
 

A full reopening of the Japan and South Korea markets to US beef would add US$80 to US$90 to the value of a head of cattle, said the US National Cattlemen's Beef Association.

Grain prices, the economy, fuel and input costs have cost cattle producers US$170 a head since last year, reported Gregg Doud, an economist with the association. For him, however, import restrictions in key markets are the main cause of cattle producers' economic woes.

A US head of cattle costs US$1,125, but if exports to Japan and South Korea are at full throttle, cattle producers could get US$80 to US$90 a head, said Doud.

Japan and South Korea were the top export markets of the US beef industry until the first case of mad cow disease was discovered in December 2003. For years, beef producers in the US have been expecting an easing of import restrictions in the two markets.

At present, Japan only allows beef from cattle aged 20 months or younger.

South Korea imports certain products from animals younger than 30 months old. No significant exports from the US have entered the country since October due to problems in past shipments.

South Korean President Lee Myung-bak is set to meet with President George W Bush next month. The US government is hoping the beef market access issue will be resolved by then, and that the US-Korea Free Trade Agreement would be ratified. 

The "controlled risk" status given to the US by the World Organization for Animal Health last year had beef exporters expecting the improvement of import policies. None has occurred so far.