DENVER, Colo. — The United States posted record beef exports in recent years, but sales might have been better if not for BSE.
While 2012 was a record export year and 2013 is shaping up to be even better at $6 billion worth of sales, the curse of BSE still taints market opportunities, said Phil Seng, head of the U.S. Meat Export Federation.
The U.S. probably lost at least $16 billion in sales and spent $10 million a year since 2004 in recovery, he told the International Livestock Congress in Denver Jan. 13.
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Increased audits, carcass segregation, inspections and trade missions have increased packer costs. Many countries still limit the trade to beef from animals younger than 30 months.
And while the U.S. was shut out, other competitors stepped into the lucrative Asian market.
The U.S. now competes against Australia, Canada, Mexico and New Zealand in the wealthy markets of Japan, South Korea and China.
Mexico is the newest entrant into Japan and its exports have grown nearly 50 percent in recent years, promoting “tasty beef from the sunshine country.”
“Our competition is very export focused,” Seng said.
New Zealand exports 80 percent of its beef, and Australia follows closely at 60 percent. Seng said they are masters at customer service.
“They will meet the specs of whatever country they are dealing in, and this is a huge advantage,” he said.
“The United States is always looking at the domestic market first and then maybe international as an afterthought.”
The U.S. exports 15 to 19 percent of its beef. Mexico, Japan and Canada are the prime destinations.
Changes to BSE trade rules at the World Organization for Animal Health have improved access to many markets. It also opens the door to new competitors.
Ireland, France, the Netherlands and Poland have been approved to ship beef to Japan. The European Union’s decision to triple funds for international promotion of agricultural products helped their efforts. The EU has become more export oriented, especially on pork and beef.
“We are starting to see a very aggressive push by a lot of European markets in the Asian theatre, not only in Japan but in South Korea and China,” Seng said.
Still, the U.S. has had considerable success in Japan, even though it can ship only youthful beef and is still subject to a 38.5 percent tariff. U.S. beef exports to Japan were up more than 50 percent at the end of November from the same time last year.
The BSE experience taught the U.S. that its all or nothing approach to regaining market access did not work.
“We got a lot of nothing. That approach is still out there,” Seng said.
However, the best customers for U.S. beef remain Mexico and Canada. Continuing disagreements over country-of-origin labelling laws in the U.S. and threatened retaliation from Canada must be taken seriously.
“We don’t want to do anything that will jeopardize those kind of sales because probably 40 percent of exports either go north or south, so it is very important how we deal with Canada or Mexico,” he said.
U.S. Department of Agriculture statistics as of the end of November estimated beef production for 2013 at 25.7 billion pounds, nearly the same as 2012. However, production is expected to drop to 24.3 billion lb. in 2014, said the report.
The U.S. exported 2.5 billion lb. last year and imported 2.2 billion lb.
The USDA forecasts export volumes may fall to 2.3 billion lb., with imports steady at 2.2 billion pounds.
The U.S. also imports live cattle, buying 1.3 million head from Mexico in 2012 and 750,000 from Canada.
It imported 842,390 head from Mexico between January and November of 2013, while Canada sent 917,280. This includes all classes of cattle.
Canada imported 170,000 tonnes of U.S. beef in 2012, which accounts for 17 percent of its consumption.
