Emphasizing the quality and consistency of US red meat is the key to expanding the international customer base, according to the impressive lineup of opening day speakers on Wednesday at the US Meat Export Federation (USMEF) Spring Conference held in Kansas City, Missouri in late May. USMEF members from throughout the nation also learned about additional resources available to promote US pork, beef and lamb in emerging markets through USDA’s new Regional Agricultural Promotion Program (RAPP).
USMEF Chair Randy Spronk, a pork and grain producer from Edgerton, Minn., welcomed attendees with a reminder of how critical free trade agreements (FTAs) have been in creating global opportunities for the US red meat industry.
“Would we have found success in South Korea if US beef was still tariffed at 40% and US pork at 25%?” Spronk asked. “Would we have been able to develop Central and South America, or the Dominican Republic, into reliable destinations for US red meat?"
While they are not full-blown FTAs, Spronk also praised the market access gains achieved in the US-China Phase One Economic and Trade Agreement and the US-Japan Agreement.
“With the weak yen and other headwinds in Japan, imagine trying to compete effectively there if US beef and pork were still at a tariff disadvantage,” Spronk noted.
USMEF President and CEO Dan Halstrom followed with an update on year-to-date export results for US pork, beef and lamb. On the pork side, Halstrom explained that while shipments to leading market Mexico are on a record pace, US pork is achieving broad-based growth in several regions. Halstrom noted that first quarter export value ($2.1 billion) equated to more than $64 per hog slaughtered, while March exports averaged nearly $71 per head.
March was also a great month for US beef export value, which equated to nearly $455 per head of fed slaughter. The first quarter average was $408, up 9% from a year ago, which Halstrom said was a very encouraging metric.
“This tells me that the global consumer is willing to pay because they understand the value of US beef,” Halstrom said. “We’re different. We’re higher value, higher perception. US beef is not a commodity product, like a lot of our competitors. This is a key takeaway.”
Guest speaker Randy Blach, CEO of CattleFax, echoed these sentiments in explaining how US beef competes for the consumer dollar, both in the US and internationally.
“The biggest change in the beef industry has been quality,” Blach said. “And we can never lose sight of that – our niche is grain-fed, high-quality beef that really nobody else can produce around the globe. Those of you who are producers in the room, you have also invested in genetics and you have gotten paid dividends for those decisions.”
Blach also gave an update on the US cattle industry’s herd rebuilding efforts. He noted that the US herd is not yet in expansion mode, but liquidation has definitely slowed, and the herd size has stabilized. He cautioned that even when expansion does materialize, it will not mirror the previous expansion cycle.
“The cost of money is significantly different, and there’s a worry hanging over people’s heads about going back into a La Niña [weather pattern],” Blach said. “The last cattle cycle saw the most rapid expansion in the history of our industry in 2014 and 2015. This time I think we’ll get some expansion, but it's going to stretch out over a longer period of time.”
As for expanding exports, Blach stressed the need for patience and persistence in developing new markets.
“During my career at CattleFax, I have seen how USMEF is able to go into these markets and build a foundation,” he explained. “Japan didn't just become our biggest market overnight, did they? It took decades to build that market, to build confidence and to build relationships. This is not instant gratification that you're talking about. You need to have a vision of the decisions you're making today, and know that we may not see the fruit of those decisions until five or 10 years down the road.”
Daniel Whitley, administrator of USDA’s Foreign Agricultural Service, praised USMEF members for their productivity gains while also providing an update on RAPP funding allocations. He highlighted RAPP’s goal of helping US exporters expand their customer base beyond traditional and established markets, focusing on regions such as Africa, Latin America and Southeast Asia.
Whitley noted that RAPP places a specific emphasis on Africa, which is projected to hold 25% of the world’s population by 2050. That same year, the planet’s total population is expected to reach 10 billion, which presents a massive food production challenge.
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