U.S. beef exports have had their challenges worldwide in 2015. U.S. Meat Export Federation (USMEF) President and CEO Phil Seng said the worldwide trade in beef has been down, as well as for the United States. To date, U.S. beef exports are down about 12 percent on volume and about eight percent on value. The U.S. has been challenged in having a stronger U.S. dollar, which makes it more difficult to compete in a global market place. Seng said the U.S. dollar has appreciated by 20 percent. That has made U.S. beef and other products 20 percent more expensive around the world.
U.S. beef exports to Japan are down about 15 percent. Seng attributes that to Australia and Japan reaching their Economic Partnership Agreement (EPA). This provides the Australians with a ten percent duty on frozen beef and about an eight percent duty on chilled beef. Seng said the Australians are working very hard to establish themselves in that market.
The structure of the Australian beef industry is also changing, which is putting the country in direct competition with the United States. Australia used to produce mostly grass-fed beef. Today about half of the beef shipped from Australia is grain-fed beef. Seng said that’s helping Australia mitigate their latest drought in putting cattle in feedlots. That’s also pinning U.S. beef in direct competition of Australian beef.
The U.S. continues to battle back from losing global market share from having its first Bovine spongiform encephalopathy (BSE) case in 2003. When the U.S. was out of those markets, Seng said our competition, like Australia, started to provide a product that the U.S. had once provided. That makes it all the more difficult to get back into these markets.
The U.S. beef industry also continues to watch the Trans-Pacific Partnership (TPP) agreement. Seng said TPP is critical to the beef industry in exporting to these Asian-Pacific countries. Once TPP is ratified, he said the duty or tax on U.S. beef would drop from 38.5 percent to 27.5 percent.
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