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May 4, 2001

'A remarkable achievement'

Beef, pork exports continue to increase
in volume and value...

"Although U.S. prices were relatively high in 2000, U.S. beef exports rose 10 percent in volume and 11 percent in value over 1999, a remarkable industry achievement," said Philip Seng, president and chief executive officer of the U.S. Meat Export Federation (USMEF) on the release of the 2000 export figures by USDA. "Our pork exports did even better. We sold 12 percent more in tonnage and 18 percent more in value."

The U.S. beef industry exported 1,225,344 metric tons (mt) of beef and beef variety meats in 2000, topping 1999 by 10 percentage points. U.S. beef exports were worth more than $3.5 billion in 2000, an 11 percent increase over 1999. U.S. pork exports exceeded the record year, 1998, by almost 38,000 mt. In 2000, the United States exported 566,895 mt of pork and pork variety meats, a 12 percent increase over 1999. The value of U.S. pork exports rose 18 percent over 1999 to more than $1.3 billion.

Seng noted that U.S. pork exports to the three top markets, Japan, Mexico and Canada, increased significantly, especially in value. He attributed the increases in part to industry efforts, spearheaded by USMEF, to develop new products and a new customer base. "Although prices were relatively high in 2000," said Seng, "they were also relatively stable. Most of our pork exports are purchased by overseas processors, who appreciate the safety and consistency of our product. Although competition in the international market is fierce, Taiwan and South Korea are no longer exporting to Japan, due to animal health problems.

"In Japan, our chilled beef and pork products have steadily gained a reputation among retailers and foodser-vice companies for excellent palatability. U.S. frozen beef is in demand for thin meats for the burgeoning beef bowl and Korean style barbecue markets.

Seng also pointed out that: "All the leading markets for U.S. beef exports purchased more U.S. beef products in 2000 than in 1999. Consumption is rising, but our exports are rising at a higher rate. The world has recovered from the 1998 currency crisis, and most developing countries had a positive growth rate, although many of the world's economies remain fragile. Beef production is declining in countries without a large forage basis. Beef and pork production is easier in large, less densely populated countries such as the United States."

Although the USDA statistics show a decrease in beef and beef variety meat exports to Russia, when shipments transshipped through Latvia are taken into account, U.S. exports there were actually almost 6 percent higher, reflecting a strengthening economy and a stabilized ruble.

U.S. pork shipments to Russia rebounded during the final quarter of 2000 as tighter EU supplies reduced the need for dumping and allowed a commercial market to function. Russia mostly imports underutilized U.S. pork cuts destined for processing. Including items transshipped via the Baltic States, U.S. pork exports to the Russian Federation totaled over 11,000 mt.

USMEF has also worked hand in hand with the U.S. Department of Agriculture (USDA) to make trade as trouble free as possible. "The landmark trade agreement with Japan in 1988, the accord which opened South Korea's market to our product and the North American Free Trade Agreement (NAFTA), are all bearing fruit in this new century," declared Seng. "Declining tariffs in these three countries helped offset higher industry prices. U.S. beef exports (including variety meats) to South Korea surged 37 percent in 2000 due to industry positioning prior to the liberalization of the Korean market on January 1, 2001, and lower domestic cattle inventories.

"We are hopeful that the agreement which is paving the way for China's entry into the World Trade Organization (WTO) will result in significant increases in exports to China. Already, in 2000, China is our fourth largest market for pork and our fifth largest market for beef. U.S. exports to the China region were also stronger based on solid demand in China and a resurgence of steak-eating in Hong Kong."

U.S. beef exports to ASEAN countries climbed 111 percent over 1999 to 10,919 mt. Seng noted that this growth was despite the additional marketing constraint provided by the strength of the dollar. Looking to the immediate future, Seng commented that "Although we are hopeful for similar success for U.S. beef exports to the ASEAN region in 2001, slower economic growth and concerns arising from Europe's bovine spongiform encephalopathy (BSE) problems make this year's marketing environment more challenging.

"U.S. pork faced challenges throughout Asia in 2000," said Seng. "Asian pork prices were low outside of Japan causing demand for imports to fall. The United States also faced great price competition throughout the region."

Seng also credits the continuing export success of the U.S. red meat industry with a new industry-wide outlook: "U.S. packers are doing things they never did in the past. Recognizing the increasing importance of U.S. exports, companies are focusing on extremely specific, individual opportunities. With the growth of high-tech tools such as USMEF's own Veritas Marketing and Supplier Search, U.S. companies can make more astute decisions based on a greater understanding of their customer base. There is a dynamism in the industry that is leading down new avenues to new, ever greater goals."