What is in this article?:
• Easing restrictions on beef imports to Japan will be good for U.S. beef industry.
• Global beef supply in 2011 was really tight.
• U.S. beef remains a bargain.
ERIN BORROR, center, U.S. Meat Export Federation, chats with Michael Genho, right, and Brad Williams during a break at the recent Beef Financial Management Seminar in Amarillo.
U.S. largest beef exporter
“The United States is still the largest beef exporter in the world and also the largest importer.” Canada accounts for the largest percentage (35 percent) of beef brought into the United States.
She said the United States still has an edge with high quality beef with grain-fed versus mostly grass-fed beef from other competitors. The relatively weak U.S. dollar, compared to other currencies, helped move U.S. beef in 2011. “We lost some of that advantage in 2012, however. That’s why the value of U.S. beef exports is up while the volume is down.”
The Japanese yen has been very strong, making U.S. beef more affordable. “Other currencies remain weak,” she said.
But U.S. beef remains a bargain. “High quality, grain-fed beef is affordable.”
Exports are important since U.S. consumption is down. “U.S. combined red meat and poultry consumption in 2013 is expected to be 11percent less than in 2007. Demand outside the United States is stronger. We see a lot of potential for growth both in the United States and the world.”
Increased gross domestic product of developing countries will mean higher demand for meat, Borror says. “As incomes increase, beef demand grows.”
The Chinese factor could be huge. “The middle class in China is expected to exceed the total U.S. population by 2020. That will be a significant number of people with higher spending power.”
She said China currently has “record high beef prices.” That market, she added, offers potential “for steady growth and a huge opportunity,” but remains closed to U.S. exports. The European Union also offers increased market potential for U.S. beef.
Japan also offers opportunities with relaxed trade restrictions. “We hope to see increased access to Japanese markets early next year,” Borror said.
Currently, Japan allows only whole-muscle cuts from U.S. cattle that are 20 months old or younger. That’s a holdover restriction from the 2003 BSE episode, after which Japan banned all U.S. beef imports. The 20-months-or-less restriction is a moderation of that ban and further loosening of the restriction is expected in 2013.
She refers to a proposal, LT30 (less than 30), which will allow U.S. beef imports from cattle less than 30 months old into Japan.
Before LT30, the United States could send in only a limited supply of beef; supply was inconsistent; and price was high. “After LT30, more than 95 percent of fat cattle are available for export into Japan,” Borror said. Supply will be consistent by season and price will be competitive with other Asian countries. The Japanese market also gets increased supplies of thin cuts, chucks and variety meats, higher grade beef and “branded US beef.”