May 16, 2020

 

US beef global exports set record pace

 

 

Global exports of US beef (including variety meat) were on a record pace both in volume - 334,703 tonnes, up 9% on-year - and in value (US$2.06 billion, up 8%), for the first quarter of 2020, reported US Meat Export Federation (USMEF).

 

COVID-19 has impacted beef demand in Asian markets at varying degrees and on different timetables. Some patterns are common across most markets, including surging retail purchases as consumers prepare more of their own meals at home, as well as sharp declines in the high-end dining, catering and hospitality sectors.

 

Korea is coming off a record year in which US beef exports reached US$1.84 billion, fuelled by exceptional retail and foodservice demand for cuts traditionally popular in the market and a growing appetite for western-style steak cuts. Korean consumers also enjoy home meal replacement items at a very high rate and are well-versed in purchasing meals online for home delivery. As Koreans spend more time at home due to COVID-19, these trends have accelerated.

 

The US is the largest supplier of beef to Korea and US beef is widely featured in Korea's foodservice sector, where COVID-19 has created significant challenges. But restaurants have found innovative ways to meet the changing needs of consumers.

 

"With sit-down dining being severely interrupted in Korea, many traditional in-restaurant promotions for US beef have been suspended," explained Dan Halstrom, USMEF president and CEO. "But even before COVID-19, our staff in Korea was very focused on the use of social media to draw consumers and generate interest in US beef. Online ordering and delivery platforms were already gaining popularity in Korea, but growth over the past two months has been remarkable and we expect it to continue even as in-restaurant dining gradually returns."

 

"The US beef industry is excited to see Korea moving to the next phase of recovery, but we understand that it's a long road back," Halstrom said. "This market has been the growth pacesetter for US beef exports the past few years and we are confident this will continue, but it's important that we recognise and accommodate the changing needs of consumers."

 

Taiwan has confirmed just 432 COVID-19 and only six deaths, but the pandemic has certainly impacted the Taiwanese economy. After a scare with imported virus cases, many consumers chose to stay home in March and early April, leading to sharp declines in foodservice sales. Online sales platforms thrived, however, as many restaurants shifted to promoting lunch boxes and meals for delivery.

 

In late April, USMEF resumed face-to-face promotions of US beef in supermarkets and hypermarkets, as consumers became more comfortable interacting with store personnel and more receptive to tasting samples.

 

Japan, the leading international destination for US beef, is in an earlier stage of economic recovery than many other Asian markets, with Prime Minister Shinzo Abe declaring a state of emergency on April 8 and adding further restrictions the following week. Schools in some Japanese prefectures were scheduled to reopen last week, but several others have extended school closures through the end of May, in line with the government's recommendations on staying home through the end of the month.

 

COVID-19 also put a severe dent in Japan's booming tourism sector, which was poised to shatter records this year with a major boost expected from Japan's hosting of the 2020 Summer Olympic Games, which are now postponed until next year.

 

Retail beef sales have remained strong in Japan, with USMEF shifting its promotional strategies to reach consumers preparing more meals at home. "Today's Dinner" is the title of a daily message sent to Japanese Instagrammers by USMEF at the same time each afternoon. The message offers a variety of dinner ideas anchored by US red meat.

 

Halstrom explained that the recent disruption to Japan's economy will make it more difficult to fully capitalise on the new US-Japan Trade Agreement, which entered into force January 1. But he emphasised that the agreement provided significant tariff relief for US beef and a corresponding boost in Japan's demand.

 

Prospects for beef export growth in Asia are also bolstered by the US-China Phase One Economic and Trade Agreement, which recently entered into force and significantly expands access for US beef. Regulatory changes expanding the range of US cattle eligible for China took effect March 20, so there was little impact on first quarter export results. But weekly USDA sales data in April suggest the customer base in China is growing and importers are capitalising on long-awaited relief from a range of trade barriers.

 

The US beef industry's primary competitor in Asia is Australia, where beef production is down significantly this year due to herd rebuilding. Combined with market access gains in Japan and China and continued growth in Korea and Taiwan, 2020 promises to be a strong year for US beef in Asia and across the globe, though COVID-19 has tempered expectations.