Around the world, consumers are quickly growing to love the taste of U.S. beef, and the U.S. Meat Export Federation (USMEF) believes the beef industry is in a good place, despite recent challenges surrounding animal welfare, free trade agreements and BSE.
"I think we can be encouraged by our export markets," said Philip Seng, USMEF president and CEO. "Despite a decline in export volume, prospects for U.S. beef remain positive across the globe. We are, for the most part, encouraged by the response to the recent BSE case. Nearly every trading partner followed established science and did not alter our level of market access. Consumer demand for U.S. beef is solid, but we need to eliminate trade barriers and maintain an active presence in these markets in the face of aggressive competition if we want to keep export value strong and get back to the record volume pace established in 2011."
Taking a glimpse at Europe, Russia and the Middle East, it's full steam ahead.
"The Middle East is an area of oil-producing countries, and their economy continues to grow at a staggering rate," explained John Brook, USMEF regional director for Europe, Russia and the Middle East. "They are opening more supermarkets, and the increased demand for quality food products is creating a great market for the U.S. Larger amounts of muscle cuts and value cuts are being moved to that area. The growth in Egypt was very large last year as well. I think we are a little more cautious about what will happen in Egypt this year. There is an election going on right now. I think there is still unrest in Egypt, and while that doesn't necessarily change their need for food products, it's not helping their economy.
"In Europe, we have better market access now," Brook added. "The duty free will be expanded from 20,000 tons to 48,200 tons. We will have competition from Australia, Uruguay, Canada and New Zealand, but I feel confident that U.S. beef has made a good impression in Europe."
Animal welfare continues to be a hot topic in Europe, which could limit export opportunities.
"Sitting on my side of the Atlantic, looking at America, I was very struck that usually the push for animal welfare regulations are coming from here, but now they are big in the U.S.," Brook added. "This is something our consumer wants, and we have to pay close attention to the topic. The animal welfare regulations limit the use of sows from gestation crates, and that could impact the pork export opportunities there."
In Asia, the California BSE case earlier this year significantly impacted the South Korean market.
"Although BSE didn't impact our foreign markets too much, it significantly impacted Korea," said Joel Haggard, USMEF senior vice president for the Asian Pacific. "Sales have been quite weak, although it's been quite weak even before the BSE. The other thing that's happening is the Korean beef herd got way too large. The herd size is coming down with the consequent impact. The gap between Korean beef prices and import prices is quite significant. The narrowing of the gap is making imports more enticing, but Koreans are still preferring domestically-raised beef.
"In China, the U.S. beef industry is very much looking forward to gaining market access," Haggard added. "They have record-high beef prices caused by a beef shortage in China. We really need that market; that should be a priority for us because there is tremendous demand there."
Finally, while pork exports to Mexico have continued to grow, beef exports are struggling.
"Mexico experienced a severe economic downturn in 2008, and they are just now recovering," explained Chad Russell, USMEF regional director for Mexico, Central America and the Dominican Republic. "Another factor impacting the market is the weak Mexican peso, which is down 35 percent. The peso is creating a problem, especially in a time where U.S. products are at an all-time high. It's creating a purchasing dilemma for Mexican consumers. The price of corn is also high, caused by one of the most severe droughts they have experienced in the last 50 years. The price of U.S. corn has also been quite high compared to historic levels. All of these factors are putting extra pressure on Mexican producers. However, our exports to Mexico have increased every year, it's just more pork and poultry and less beef.
"Beef is down 13 percent through March," Russell added. "Because of the drought, Mexicans have increased their slaughter rates and their exports of feeder cattle to the U.S. There have been a lot of cattle - exact numbers unknown - that have died as a result of the drought. As a result, there will be less Mexican beef in the market place. The silver lining is, assuming that the Mexican economy will recover and U.S. prices will level out, we might see great exports to Mexico. Finally, Central America is a small but dynamic market with a lot of opportunities. The bright spot is the free trade agreement with Panama, which is expected to be implemented this fall."