Opportunities Outside the Border
Access to foreign markets is focus of Joint International Markets Committee.
"We are living in extraordinary times," CattleFax's Brett Stuart told those in attendance at the Joint International Markets Committee meeting Feb. 3 at the 2012 Cattle Industry Convention in Nashville, Tenn. Stuart was referencing the burgeoning global population and said, "In the next 100 years, the things we'll have to develop to keep up with this population will be beyond any other time in history."
He also noted that with the current tight supplies for several ag commodities — including beef — there are leaders in foreign governments who are very concerned about the future availability and price of food.
Along with that he emphasized that the growing global market is helping boost U.S. beef demand and add revenue.
Dan Halstrom, senior vice president of marketing and communications for the U.S. Meat Export Federation (USMEF) also noted that beef exports have had good momentum and the need to "keep it going."
Halstrom stated, "In a weird way the BSE case almost a decade ago benefitted the U.S. because it forced us to develop other markets." He shared that the Middle East, Dubai, Saudi Arabi and Lebanon are all areas with increasing demand for U.S. beef.
"As the standards of living rise there, they are demanding a higher-quality product," he explained. "Our challenge going forward is not only to grow these markets, but others, too."
However, he noted, "We still have access issues out there," and specifically cited Japan and China.
Regarding Japan, Halstrom said it is anticipated the 20 months of age import rule should be dropped to Under Thirty Months (UTM) sometime in 2012 — possibly as soon as the second quarter. That should have an immediate effect on increasing beef export tonnage and value even more.
Specifically, he said he expects the UTM will help with exports of offal and variety meats to Japan and said, "This is probably where the biggest dollar value increases will be seen."
Halstrom gave the example of beef small intestines and said that market is worth $47 million per year. Of it, he said, "This is a game changer if we can get Japan back on board soon."
But he also noted that age and source verification probably won't go away completely. Halstrom said, "We feel strongly there will still be a demand to know where that meat came from. Traceability is important and has value."
With its 1.4 billion consumers, Halstrom said access of U.S. beef into China could also be a game changer. He reports that USMEF is already doing seminars there to educate the public about U.S. beef. Halstrom said, "We are preparing for the day we get direct access to China."
He emphasized the need to work together as an industry on export market access issues.
Gary Horlick, a legal expert on foreign trade, also emphasized the need to continue working for access — particularly using sound science. He, too, feels the UTM to Japan could occur this year; he's less optimistic about access to China in the near term.
Horlick did report that a bright spot in 2011 was that beef trade to the European Union (EU) occurred and $500,000 of beef sales could be sold into that market in 2012. "It took a long time, but persistence pays," he said of the EU market.
Horlick also mentioned North American Free Trade Agreement (NAFTA) and said, "It's worked like a charm." He is encouraged by the free trade agreements being worked on with Korea, Colombia and Panama.
Next, NCBA is supporting efforts for a Trans-Pacific Partnership (TPP) with the countries of Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam. Specifically, the TPP would remove tariff and non-tariff trade barriers for U.S. beef exports to participating countries.
Horlick also emphasized the need for World Organization for Animal Health (OIE) guidelines to be followed with trade regulations rather than World Trade Organization (WTO) standards. "WTO-plus is not good enough," he concluded.
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