US Beef and Pork March On

*The U.S. Meat Export Federation held a board meeting last week in New Orleans, at which it announced that the outlook for U.S. meat exports remains strong. Projections show that pork and beef exports for 2012 will be on par with the levels of the previous year, admirable considering that 2011 was a record breaking year for the industry.*

Phil Seng, president and CEO of the MEF, expects pork to maintain its strong positions from last year in terms of both export volume and export value, matching 2.3 million metric tons and $6.1 billion respectively. Beef volume should stay at 1.2 million metric tons with a possible 4% increase in value.
The MEF is hopeful that Japan will start importing beef from animals 30 months or younger again, thus loosening the current 20-month cutoff. In April, a case of BSE (bovine spongiform encephalopathy) was discovered in a California Dairy, but the markets were saved by USDA’s quick reaction. MEF staffers also played a significant role in limiting the damage from this discovery.

!m[](/uploads/story/86/thumbs/pic1_inline.png)The general trend is of the U.S. regaining market share on the Japanese market, which had been previously lost to Australia, since the first case of BSE in the United States in 2003. This is vital for U.S. companies, operating in the industry, as the Asian country is a major beef importer and as such represents an important strategic market. Seng expects that this year’s beef exports to Japan would increase in volume by 18 to 20 percent, compared to 2011 and that other markets like Korea, Russia and the Middle East would also contribute to increased exports.

Meanwhile, Mexico, the top importer of U.S. beef in 2011, has seen recent decline in volume due to the country’s struggling economy. Combined with the recent ban of U.S. beef containing ractopamine, this puts beef export roughly on the same levels as 2011. But according to Chad Russell, the MEF regional director for Mexico and Central America, it also creates opportunities for pork (and poultry) producers.

With its current economic troubles, Mexico has turned to less expensive meat and one that its population can afford to buy. This reflects on pork exports, as Mexico remains the biggest importer of U.S. pork, based on volume, while Japan, where the demand is for higher quality pork, is the number one, regarding value.
Other strong markets for U.S. pork in 2011 – China and Korea – are expected to decline, because the countries have manage to cope with the outbreaks of disease, which had been troubling local producers. But with both Russia and Mexico providing new opportunities Phil Seng is confident of the pork industry’s bright future. And there are more than enough arguments supporting his belief. MEF Chairman, Danita Rodibaugh reminded that in March the value of pork exports for the previous 12 months reached the equivalent of $60 per capita of the US population, which was an all-time record and one of the U.S. nation’s “great agricultural success stories”. In these favorable conditions, U.S. pork producers can focus on developing and improving their businesses, without having concerns about the market for pork shrinking.