Canada struggles in Korean beef market

Jun 25, 2024

South Korea is the most important market for American beef.

In 2022, the U.S. exported US$2.7 billion worth of beef to Korea, according to data from the U.S. Meat Export Federation. That figure was $2.1 billion in 2023.

In both years, U.S. exports to South Korea exceeded American beef sales to Japan.

Canada has captured a tiny share of Korea’s beef imports, valued at US$4.5 billion in 2022.

“U.S. beef accounted for 55.3 percent of South Korea’s total imports of the meat last year (2022), followed by Australian beef with 34 percent and beef from New Zealand with 4.8 percent and from Canada with 4.1 percent,” said Yonhap, a Korean news service, in 2023.

Canada has had a free trade agreement with South Korea since 2015 and so do Australia and America.

But South Korea imposes a 16 percent tariff on Canadian beef, much higher than the eight percent tariff on U.S. beef, said Dennis Laycraft, executive vice-president of the Canadian Cattle Association.

“The main reason we’re behind (in South Korea) is because of that tariff disadvantage.”

Data from Meat and Livestock Australia indicates that South Korean tariffs on Aussie beef are scheduled to drop to 10.6 percent in 2024 and tariffs on American beef will sink to 5.3 percent before being eliminated in 2026.

The CCA hopes the federal government can negotiate with South Korea to accelerate elimination of tariffs on Canadian beef. Right now, they’re scheduled to disappear in 2030.

This spring, representatives of Canada’s beef sector traveled to South Korea as part of a trade mission with federal export and trade minister Mary Ng.

“We are working with our federal government to reduce Canadian tariff rates (in South Korea) … This will level the playing field with our (U.S.) neighbours and open markets,” said CCA president Nathan Phinney.

Canada’s challenges with beef are representative of larger issues in the Korean market, which is a major importer of agri-food and seafood.

Data from Agriculture Canada shows that:

In 2022, Korea imported US$46.8 billion worth of agri-food products and seafood;

The U.S. is the largest player in Korea, supplying $10.6 billion worth of agri-food and seafood;

Canada is the ninth largest supplier, with a 2.5 percent share of the market, well behind Australia’s 8.4 percent; and

In 2022, Canada exported US$1.2 billion worth of agricultural goods to South Korea, mostly canola oil, wheat, pork and beef.

Canada has a significant trade deficit with Korea. In 2022, it exported $8.7 billion in merchandise to South Korea and imported $13.2 billion worth. Canada’s largest exports were mineral fuels and oils, mineral ores, pulp and paper and meat products.

Most imports from Korea were manufactured goods, including cars, motor vehicle parts and industrial machinery.

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Video: US Soy: Pig growth is impaired by soybean meal displacement in the diet

Eric van Heugten, PhD, professor and swine extension specialist at North Carolina State University, recently spoke at the Iowa Swine Day Pre-Conference Symposium, titled Soybean Meal 360°: Expanding our horizons through discoveries and field-proven feeding strategies for improving pork production. The event was sponsored by Iowa State University and U.S. Soy.

Soybean meal offers pig producers a high-value proposition. It’s a high-quality protein source, providing essential and non-essential amino acids to the pig that are highly digestible and palatable. Studies now show that soybean meal provides higher net energy than current National Research Council (NRC) requirements. Plus, soybean meal offers health benefits such as isoflavones and antioxidants as well as benefits with respiratory diseases such as porcine reproductive and respiratory syndrome (PRRS).

One of several ingredients that compete with the inclusion of soybean meal in pig diets is dried distillers grains with solubles (DDGS).

“With DDGS, we typically see more variable responses because of the quality differences depending on which plant it comes from,” said Dr. van Heugten. “At very high levels, we often see a reduction in performance especially with feed intake which can have negative consequences on pig performance, especially in the summer months when feed intake is already low and gaining weight is at a premium to get them to market.”

Over the last few decades, the industry has also seen the increased inclusion of crystalline amino acids in pig diets.

“We started with lysine at about 3 lbs. per ton in the diet, and then we added methionine and threonine to go to 6 to 8 lbs. per ton,” he said. “Now we have tryptophan, isoleucine and valine and can go to 12 to 15 lbs. per ton. All of these, when price competitive, are formulated into the diet and are displacing soybean meal which also removes the potential health benefits that soybean meal provides.”