Cattle farmer Ed Greiman of Garner in north central Iowa says his experience on Iowa's South Korea/China Trade Mission last week has taught him that South Korean consumers have the same concerns as U.S. consumers. "They are very concerned about food safety and food quality. That's no different than the expectations of U.S. consumers," Greiman notes.
"The South Korean market is phenomenal. I envisioned it as under-developed, but the country is full of young people who are well-educated and have good jobs. Walking around downtown Seoul is no different than walking around Chicago or New York City," he says.
"These are people looking to add protein to their diets. They're looking for beef because it's the Cadillac of meats," he adds. "South Korea just can't provide that much for their population themselves, so the country will need to import beef."
South Korea can't produce this much, so they'll need to import beef
Greiman, who is president-elect of the Iowa Cattlemen's Association, is also a board member of the Iowa Beef Industry Council, which funded the trip. Greiman joined 40 other Iowans on the mission that includes government, business and industry and farm representatives. Greiman is only participating in the leg of the trip that visits South Korea.
In a meeting with the Mr. Jae-Soo Kim, the #1 vice minister from the Ministry of Food, Agriculture, Forestry & Fisheries, the Iowans talked about the pending Free Trade Agreement (FTA) with South Korea. That agreement has been on hold for nearly five years, and the Obama Administration is readying it to present to Congress.
That trade agreement is critical to Iowa and the U.S., says Iowa Secretary of Agriculture Bill Northey, who is also on the trip. Currently, for every $100 worth of beef the U.S. sells to Korea, a tariff or tax of $40 must be paid to South Korea. If the FTA passes Congress, it will eventually eliminate that tariff. For Iowa alone, the impact of passing the bill will increase its sales to South Korea by $1 billion, Northey says.
Competition from other countries wanting to sell beef to Korea
Other beef-producing countries are aggressively going after the market in South Korea because it has the 12th largest economy in the world. But the U.S. faces competition from a number of other countries who also want to sell beef to Korea.
Besides passage of the FTA, Greiman emphasizes that Iowa cattle farmers need to remember they are producing food. "We're not just selling cattle to a packer and that's the end of it. Packers are just the middlemen who deliver our food to the U.S. consumer and the people in South Korea."