U.S. meat exports are staying steady despite turmoil in Europe and some other economic bad news. During a media conference Thursday, Phil Seng, head of the U.S. Meat Export Federation, and several country specialists or the organization offered media insight into key global trade for 2012, and beyond. Seng says he is optimistic looking into the future, noting the evolving trade agreements with Korea, Colombia and Panama. The first two have officially gone into effect though there are some beef issues to clear up with Korea. The Panama free trade agreement remains under development, with hopes it will be put into action later this year.
There are some interesting trends opening doors in some markets, and tightening exports in others. For example, the foot-and-mouth disease outbreak in Korea reduced domestic pork supplies significantly and created an opportunity for U.S. pork to fill the need. However, that changed rapidly. "The recovery of the herd size in Korea has occurred at a pace that has exceeded expectations," says Joel Haggard, senior vice president, USMEF for the Asia/Pacific region.
During 2011, pork production in the region fell 2 million metric tons at a time when demand was increasing. However, rapid recovery of production in these regions may dampen demand for U.S. pork in 2012 and beyond.
In Europe, tighter rules on raising pork have opened the door for more pork imports to fill the domestic need. In addition, the Russian market is becoming a new export opportunity, especially as Russia's entry into the World Trade Organization nears.
An increase in the beef import quota for Europe opens doors for more sales there as well, with an opportunity to gain more market share for U.S. beef in the region.
The Middle East is also a growing opportunity, and while oil prices are off their historic highs, they remain strong and offer support for these burgeoning economies. John Brooks, who manages the European Union, Russia and the Middle East at USMEF, notes the rising trend toward restaurants and family dining chains which is boosting a need for U.S. beef.
Bottom line, Seng says that pork exports will have a similar volume to 2011 at about 2.29 million metric tons and the value will remain about even with 2011 at $6.1 billion.
For beef, Seng says he sees a 4% increase in exports, sparked in part by growth in Japan (where a change in the 20-month limit could be near), with a value of about $5.6 billion with a volume of about 1.2 million metric tons.