Picture for beef exports still unclear

AMARILLO, Texas – Trying to predict the future for U.S. beef exports is, at best, a murky proposition.
But Alan Smith, newly-elected chairman of the U.S. Meat Export Federation, says cattlemen can be sure of one thing – the U.S. beef industry is working hard to regain markets.
Post-BSE. That effort began immediately after the December 2003 BSE announcement.
In early January, the federation put into place a crisis management plan, Smith said. The goal was to reassure a number of audiences ranging from consumers to government decision-makers, support efforts to reopen markets and, “once these things were accomplished, to begin the process of recovering market share.”
Picture abroad. In addition, the beef industry worked with an international public relations firm to roll out the message in Korea, China, Hong Kong, Mexico and Russia that U.S. beef is safe and wholesome.
Slowly, markets are beginning to come back.
Since the December 2003 announcement of BSE in the United States and the loss of major export markets, the United States has been able to partially regain exports to Mexico and Canada.
“Interestingly, a market most of us have written off for years – the European Union – is now our second-largest export destination,” Smith said.
Japanese market. The much-heralded framework for reopening the Japan market is a significant development, but there are hurdles remaining for the U.S. beef industry, he said.
“How soon will product begin to ship to Japan? Depends on who you ask.”
During the federation’s recent annual meeting in Albuquerque, cattlemen heard two different interpretations of the “agreement” between the two countries, he said.
“According to USDA, Smith said, law changes and systems should be in place to allow the shipment of beef to Japan by the end of the year. However, according to a Japanese representative from the Ministry of Agriculture, it will take longer.
In other words, he said, Japan sees the market opening up “later than sooner” as they interpret progress needed for U.S. beef exports to resume.
Smith expects Taiwan to open soon, which will be a positive step.
“Korea, our third largest export market, has politely told negotiators to come back with a proposal for allowing more of its rice into the United States before it talks about beef.”
In short, Smith said, there is a lot of work still to do.
Does it matter? Why work so hard to reopen international markets? Smith said a quick look at history gives an answer.
Beef exports in 2003 amounted to nearly 1.3 million metric tons.
“That’s 2.8 billion pounds for those of us still working with the U.S. system, which is 11 percent to 13 percent of our production. The value of these exports to the industry was more than $3.8 billion in 2003.”
Cattle-FAX estimates that cattle feeders could have done far better this year had exports continued uninterrupted, he said.
“Cattle-FAX estimates the economic loss to feeders to be $9.50 to $10 per hundred as the result of beef export losses; another $3 to $4 because we aren’t selling variety meats internationally; and another 50 cents to $1 because of interruptions in other bovine exports.
“Add it up and the market closing hit us in the pocketbook to the tune of $13 to $15 per hundred, or $165 to $190 per head. In other words, a good year could have been a really great year.”
Down the road. Looking to the future, Smith said it’s difficult to make any accurate predictions.
“As incredibly small as the risk is of having infected animals in the human food supply or of contracting the human disease from the beef we eat, BSE remains the single most challenging trade issue confronting this country, and other beef exporting countries, for that matter,” he said.
“The next year or two will be especially challenging to USMEF and those of us who believe in the value of exporting beef,” he said.
“We will be asked to reintroduce a product with a great track record for taste and safety whose reputation has been tainted in the minds of many international consumers,” Smith said.
“We will have to explain the science, we will have to build the case for product safety and we will have to resurrect consumer confidence in our product.”
“The struggle won’t be easy and exports won’t just bounce back to $3 or $4 billion dollars,” Smith said.