Despite a continuing gloom hanging over the world economy, U.S. meat exports are relatively robust and show no hints of any significant decreases in the near future. Moreoever, the U.S. Meat Export Federation, the board of which is meeting this week in Washington, D.C., is pleased so far with the "soft power" approach the Obama Administration is taking with allies and trading partners to improve global trade and foreign relations.
"As we confront 2009 we’ve had a very, very challenging year to begin with. The financial crisis, which began back in December of 2007, is still resilient, but meat exports have been somewhat resistant to the crisis," USMEF president Phil Seng said at a press conference this week. He noted that volumes and values for both U.S. beef and pork shipped abroad are above year-ago totals, albeit in single-digit percentages.
Seng also called the new beef agreement signed by the U.S. and the European Union, which will finally phase out the 20-year-old "hormone ban" that has restricted the access for U.S. beef exporters to the E.U. market, "really an important milestone." The ban, placed by the E.U. in 1989 on all beef produced from livestock that had been given hormones, limited U.S. beef exports to the E.U. to as little as 1,000 metric tons, though by the end of 2008 the total had climbed to 6,000 MTs and may reach 12,000 MTs by the end of this year. However, by the end of the four-year agreement’s fourth year, beef exports from the U.S. to the E.U. are allowed to be as high as 45,000 metric tons. "We have to work diligently to fill that quota," Seng cautioned, noting that it could be a fill-it-or-lose-it proposition.
USMEF overseas directors also spoke at the press conference. Joel Haggard, who covers the Asia-Pacific market, said the challenge in Japan and Korea "is to rebuild consumer confidence" in the current economic climate and in the wake of years of accusations that U.S. beef is somehow tainted with bovine spongiform encephalopathy. Responding to a question, Haggard said that as negotiations toward a U.S.-Korea Free Trade Agreement continue, he is not aware "of an effort to reopen the beef agreement we have with Korea as part of that." The agreement restricts beef exports to South Korea to beef from cattle no older than 30 months, but Haggard noted this restriction still allowed "the high majority of the U.S. herd" to qualify. Chad Russell, USMEF’s regional director in Mexico, noted that Mexico is not only the largest foreign market for U.S. beef but has also lately become the largest foreign market for U.S. pork as well. "It’s a price-sensitive market," he pointed out, adding that the economic downturn has brought challenges in the foodservice segment especially, which has imported as much as 20 percent of all the American beef shipped south of the border. John Brook, who covers Europe, the Middle East and Russia for USMEF, emphasized that, perhaps counter-intuitively, exports to the Middle East are doing well, while exports to Russia, which also is an energy-export-driven economy, have flattened.
With regard to the Obama Administration, the Federation’s president Seng said he has been "encouraged" by the soft-power policy, which uses a carrot-and-stick method rather than threats to make gains with foreign powers. Seng said he’s seen it work effectively with major trading partners. "It is my expressed belief that we could use it in every country we deal with," he said.