FOLLOWING last year's record year for the value of beef and pork exports, the beef export value for 2013 is slightly above 2012, while pork has slipped a little, Dan Halstrom, U.S. Meat Export Federation (USMEF) senior vice president of marketing and communication, told the Illinois Commodity Conference.
For exports, it is about maximizing the value of each cut of meat. Although the value for meat remains strong, the overall tonnage for beef will remain ahead of 2012 levels while pork falls behind, showing a 5% decline.
In 2012, for every U.S. beef carcass harvested, $216 per head was attributed to exports, and for 2013, the forecast is currently $237 per head.
For U.S. pork, the export value per head was $55.87 in 2012 and $53.78 in 2013.
Although U.S. meat production has not been restored to its 2011 level, the global demand for beef and products from the U.S. will remain high for 2014.
One contributing factor to the increase in beef exports is Japan's clarification change on the age of beef cattle, which previously had been restricted to 20 months or younger. Effective Feb. 1, the U.S. is now allowed to ship beef to Japan from animals up to 30 months of age. Even though the majority of U.S. beef is derived from beef animals under 20 months of age, Japan's rule change has increased access to its market.
In essence, this significant rule change increased the number of U.S. cattle that qualified for export to the country from 20-25% to 95%, Halstrom said.
As a result, Japan has imported 52% more U.S. beef — 183,942 metric tons — and the value has risen 35% in comparison to a year ago (Figure 1). Overall, this accounts for 21% of the total volume and 24% of the value for U.S. beef exports this year.
"In Japan for (the remainder of) 2013 and 2014, we are going to see a generic growth in the market," Halstrom said. "The family-style dining segment, the foodservice segment, is heavily reliant on U.S. beef."
U.S. beef exports to Japan are anticipated to continue to grow, stealing market share from Australia. Prior to the rule change, U.S. beef did not qualify to be sold in retail and convenience stores, hence the current expanding availability at all price points for U.S. beef products.
Another area for strong growth in the retail footprint for U.S. beef is Hong Kong, which is showing a 95% increase in volume and a 136% rise in value for 2013.
The best future opportunity for U.S. beef is China. Currently, beef from the U.S. is not eligible for import into China, but there is an effort between government and industry to open the market doors. Australia is already making great strides on the ground in China, selling its beef directly.
Mexico and Canada still remain steady marketplaces for U.S. beef.
Korea is exhibiting the largest decline in demand for U.S. beef, dropping 19%. The main reason for the downward trend is an increase in Korea's domestic production due to a government subsidy program after an outbreak of foot and mouth disease in 2010. As a result, in 2012, the domestic herd was larger than the market tolerates, and government programs are being implemented now to reduce the herd size.
Over the years, U.S. pork has been a slow, steady success story. In 2012, 27% of U.S. pork was exported, and current figures for 2013 peg it at 26%. A smaller price point attracts more global demand for pork over beef in general.
For 2013, the volume of U.S. pork exports is down somewhat. Mexico and China remain steady destinations, while Japan imported 8% less pork to date (Figure 2). Like with the decline in beef exports, Korea also has imported 33% less pork.
U.S. pork exports have increased to Central and South America and to the Association of Southeast Asian Nations, in particular the Philippines.
Good news lies ahead for U.S. pork. USMEF forecasts increases in pork exports in 2014 in all countries, with the exception of Russia, which is closed to U.S. pork.
Looking globally, the U.S. exported red meat to 127 countries in 2012. The key to future U.S. meat exports will be providing the proper education for the product designation. Education about grass-fed versus grain-fed animals, proper handling and cooking techniques and explaining the U.S. inspection processes will be necessary to expand beef and pork exports.
With more than 160 cities in China having a population of more than 1 million people, it will remain an important marketplace for both U.S. beef and pork. One key advantage U.S. meat has over China's domestic product is its safety reputation. U.S. Department of Agriculture inspection is widely recognized and respected in the China marketplace.
"USDA inspected, verified and passed: We take it for granted," Halstrom said. "In China, it is a marketing tool."
Overall, the reputation of U.S. meat will be the optimal global driver for U.S. beef and pork demand, so providing a safe, quality product is essential.