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Export Growth Committee Reviews Beef Export Trends, Helps Guide Priorities

Under the direction of co-chairs Hugh Sanburg of Ekert, Colorado, and Clark Price of Hensler, North Dakota, the beef checkoff’s Export Growth Committee met July 13-14 at the Cattle Industry Summer Business Meeting in Denver. Several USMEF staff members addressed the committee, providing updates on 2017 export results and trends in global trade, USMEF marketing activities and priorities and ongoing efforts to expand market access for U.S. beef.

Erin Borror details U.S. beef’s market share gains in Asia at this week’s meeting of the beef checkoff’s Export Growth Committee

Erin Borror details U.S. beef’s market share gains in Asia at this week’s meeting of the beef checkoff’s Export Growth Committee

Committee members had a strong interest in learning more about the recent reopening of China to U.S. beef. USMEF President and CEO Philip Seng explained that U.S. beef’s reentry into China is an important breakthrough, but meeting China’s import requirements will require a period of adjustment for the U.S. industry and USMEF anticipates that exports will begin slowly and build over time.

“I’m reminded of 1978, when the first beef agreement with Japan was for 36,000 metric tons, and at that time everyone was excited about the access we had to Japan,” Seng said. “If you look at the grain-fed beef market in China today, it’s between 30,000 and 40,000 metric tons. So in a way, we are starting out in China much the same way we began in 1978 in Japan. We certainly have a lot of work to do in displacing our competition and in growing the grain-fed beef market in China. But if you look back over the past 30 years in Japan, it’s been very successful and we feel this can also be accomplished in China.”

Dan Halstrom discusses U.S. beef’s return to China with Export Growth Committee members

Dan Halstrom discusses U.S. beef’s return to China with Export Growth Committee members

USMEF Economist Erin Borror gave the committee a global overview of beef production, consumption and trade, noting that the U.S. is the primary driver of production and export growth in 2017. She added, however, that even as Australia’s total beef production remains down from years past, its cattle-on-feed numbers are at record-high levels and it remains a formidable competitor in the grain-fed sector.

Philip Seng is interviewed by Shalee Peters of Nebraska’s Rural Radio Network at the Cattle Industry Summer Business Meeting

Philip Seng is interviewed by Shalee Peters of Nebraska’s Rural Radio Network at the Cattle Industry Summer Business Meeting

With 2017 beef export value equating to about $270 per head of fed slaughter, Borror gave specific details on how much each major export destination contributes to this total. For example, exports to Japan account for about $72 per head, with more than $13 attributed to tongues alone. Exports to South Korea account for nearly $43, with $19 attributed to short rib and chuck short rib exports to Korea. She also highlighted significant growth in U.S. chilled beef market share in Japan, Korea, Taiwan and Hong Kong.

Dan Halstrom, USMEF senior vice president for marketing, gave the committee a breakdown of USMEF marketing activities and strategies in all major export destinations, including both established and emerging markets. He reiterated that exceptional momentum for chilled beef exports to Asia has been a key driver of the overall performance of U.S. beef exports in 2017.

“The importance of chilled beef exports is that it tends to be a 52-weeks-per-year business,” Halstrom explained. “If importers buy frozen, they can buy when the price is low and not buy when it’s high. But with chilled beef, the customers are importing it each and every week. The other obvious advantage of chilled beef is that the product retains more of its flavor, tenderness and juiciness than when it is shipped frozen.”

Thad Lively, USMEF senior vice president for trade access, explained the work of the USMEF technical services team and the key role these staff members play in identifying and overcoming trade barriers for U.S. beef. Lively also further detailed the technical requirements for U.S. beef destined for China and gave an update on the U.S. Trade Representative’s proceeding aimed at addressing the shortage of available capacity for U.S. beef under the European Union’s duty-free high-quality beef quota.

To close the meeting, Export Growth Committee members approved the following statement:

We, the Export Growth Committee, confirm our confidence in the USMEF staff. We wish to contract with USMEF as they are equipped with the expertise to efficiently, effectively and nimbly carry out the AR (authorization request) and in turn our purpose statement and mission. We support fully funding AR 1840 (foreign marketing).

Committee would like to express the importance and value of MAP and FMD (USDA Market Access Program and Foreign Market Development program) funds to the success of checkoff programs and their future importance.