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November 7, 2008

          

US beef, pork exports hindered by trade barriers
                     
 

Various trade barriers in key US beef and pork markets may hinder export growth amid the global financial crisis, according to the US Meat Export Federation (USMEF).

 

Although beef and pork exports have performed well in the first eight months of 2008, the financial crisis has impacted the sector, said USMEF president and CEO Philip Seng.

 

The Japanese market is steady and consistent, but there will be a slowdown, though not as much as in other countries, said Greg Hanes, USMEF Japan director.

 

Japan's seafood consumption is on a decline, creating opportunities for red meat, Hanes said. The strength of the yen against the US dollar has also increased Japan's appetite for imported products, but Tokyo's gate-price system for imported pork hinders imports to some degree by moderating the current purchasing power of the yen, said Hanes. The obstacle is unlikely to go away until further progress in the Doha round of the WTO negotiations.

 

US beef exports are also limited by Japan's policy that restricts imports to US beef from cattle 20 months of age or younger. Hanes is optimistic that the age limit could be raised to 30 months sometime next year, but this remains a sensitive issue in Japan.

 

South Korea's economy is sluggish and the Korean won has performed poorly against the US dollar. The US beef may have returned to South Korea, but large retailers there remain reluctant to sell the product given the negative public reaction when news of the trade were revealed.

 

Mexico, the current largest US beef market and third largest US pork market, is expected to import less US meat products due to the recent devaluation of the peso. September beef export is expected to fall 13 percent from August, while pork exports may decline more than 12 percent, according to Chad Russell, USMEF director for Mexico and the Dominican Republic.

 

The devaluation of the peso is having a huge impact in the amount of imports, while the US are also having problems with exporting to Mexico due to tightened and increased inspection operations, said Russell.

 

Russia has excessive supplies and the ongoing correction may last for several months, said John Brook, USMEF director for Europe, Russia and the Middle East.  
 

Still, Brook remains optimistic about the prospects of US beef and pork in Russia, as the Russian processing industry is heavily dependent on imported product.

 

On the other hand, US pork exports to China has declined due to shifts in Beijing's policy priorities rather than current economic conditions.

 

China has begun to rebuild its domestic herd and statistics suggest a success, said Joel Haggard, USMEF senior vice president for the Asia Pacific region.

 

Haggard noted that USMEF is keeping a close eye on the food safety problem China has experienced with melamine contamination. While this issue is not related to US imports, it remains to be seen if it will cause any consumer backlash in regard to meat products.

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