December 23, 2003

 

Growth in US Meat Exports Anticipated

 

U.S. Beef and pork exports are expected to grow in 2004. Despite current high prices, U.S. Meat Export Federation president Phil Seng, expects beef exports to increase by 5.5% to 6% to 1.35 million metric tons. Pork exports should increase by 2% to 566,000 tons.

 

Growth areas are expected to be markets that already are major markets for the industry. Leading the way for beef and pork will be Mexico, Japan, China and Taiwan, he said.

 

Through 2010, those four markets could make up 75% of the growth in pork and 80% of the growth in beef, Seng said.

 

Despite high prices for its products, the U.S. has several sales points that make it competitive in the market for its red-meat products, he said. Many of these selling points overlap.

 

For pork, the U.S. can supply large volumes of chilled pork by cut, Seng said. This is growing in importance for buyers who like the convenience of one- stop shopping and for large, sophisticated grocery outlets that are moving into more westernized ways of buying and marketing product.

 

Many sellers can supply U.S. beef and pork together as opposed to countries with a much more restricted list of products to sell, he said.

 

In addition, the U.S. is recognized around the world as having one of the most strict food-safety systems and by far the most transparent system, he said.

 

The U.S. is seen as being free of major animal diseases such as foot-and- mouth disease, classical swine fever and bovine spongiform encephalopathy, or mad cow disease, Seng said.

 

The fact that the U.S. has been able to increase its exports in 2003, in spite of its share of "challenges," is testimony to the strong demand for U.S. product and evidence that importing countries have strong demand for U.S. beef, pork and variety meats, Seng said. Through October, beef and beef variety meat exports were up 8% in volume and 25% in value, increasing performance in all markets.

 

Pork export increases were more of a challenge, he said, but still rose 3% in volume and 4% in value through October.

 

Broken down into the major markets, Japanese imports of U.S. red meat products rose 19% in volume and 43% in value, through October, Seng said. Encumbered by safeguards, pork exports still managed to rise 3% in volume and 5% in value.

 

Mexican imports of U.S. beef products rose only 1% in volume through October, he said, but they were up 7% in value. Pork imports were down 7%, yet they were up 8% in value.

 

For the South Korean market, U.S. beef exports through October were up 9% in volume and 31% in value, but pork exports rose 33% in volume and 115% in value, Seng said.

 

He expressed disappointment and concern over the failed Doha round of the World Trade Organization. He was afraid that world trade would become politicized in the presidential election of 2004 if there's no progress on the talks sometime early in the year. Such an event could jeopardize any kind of an agreement by the time Trade Promotion Authority runs out in January of 2005.

 

TPA will lapse then if Congress does not extend it by two years before then, Seng said. This carries significant implications, not only for the Doha round of the WTO, but for various Free Trade Agreements the U.S. is working on.

 

Because of growing pessimism that no progress will be made with the WTO, more countries around the world are working on a series of free trade agreements on their own. The U.S. is no exception, with the Central American Free Trade Agreement that was completed this month only one, he said. Others with Australia and Morocco are still in the works.

 

U.S. Meat Export Federation sees a pork agreement with Australia and other agreements with Thailand, the Dominican Republic and the Cafta agreements as holding the most potential for growth in U.S. red meat exports.

 

The organization also feels that China holds great long-term potential for meat export growth as a growing number of cities move into those more modern ways of marketing products.

 

Although the Cafta agreement appears to face a difficult battle passing the U.S. Congress, ratifying it would open the door to more beef and pork exports, Seng said. He estimated that beef and pork exports to the region each could rise 7,000 to 8,000 tons next year, above the 9,000 to 10,000 tons of beef and roughly 7,000 tons of pork currently going into these markets.

 

Key to his estimates into the Cafta countries are agreements that tariffs and duties on U.S. prime and choice beef products would be dropped immediately and pork markets would go to a quota system that has limits above current shipment levels, he said.