International Beef Market Competition Continues To Grow

The model that the United States has established to promote U.S. beef exports internationally has been a successful one – and has spawned a growing replication of the model, proving that imitation is the sincerest form of flattery. At the same time, it is creating vigorous competition for overseas red meat customers.

The infrastructure that the U.S. red meat industry, through the U.S. Meat Export Federation (USMEF), which contracts to manage foreign marketing programs for the beef checkoff, has established in key markets has given a face to the U.S. beef industry and facilitated the development of relationships with importers, retailers, foodservice industry and government officials to grow U.S. beef exports.

“Those lessons have not gone unnoticed by our international competitors, who are making similar moves to establish permanent offices in key markets – like Japan – to recapture some of the high-margin customers the United States has taken from them over the years,” says Greg Hanes, AVP, International Marketing & Programs, USMEF. “Other nations have adopted the U.S. international model and begun aggressively pursuing the same high margins that the United States has come to enjoy from beef exports.”

U.S. producers realized a return of approximately $170 in October per head of fed slaughter, with high-value markets like Japan and Korea accounting for a significant amount of that return.

Australia has had the highest profile of U.S. competitors in key Asian markets through its beef and lamb promotional organization, Meat and Livestock Australia (MLA). In Japan, MLA has aggressively promoted its “Clean and Safe” image, developing programs for health professionals including doctors and nutritionists as well as chefs, foodservice operators and retailers. In the past year, MLA has introduced a new theme: “Traceability you can trust,” to emphasize a traceability program that has strong appeal to Japanese consumers.

While a smaller player in Asian markets, Canada’s Canadian Beef Export Federation (CBEF) has put together a concerted effort to expand both its market access and its footprint in the region. Late in 2009, Canada concluded negotiations with Hong Kong on the resumption of full market access for Canadian Beef exports, which CBEF estimated could result in an increase of $26 million per year in Canadian beef exports to that country.

"The Safe Choice" is the theme that the Mexico Beef Exporters Association (MBEA) has adopted for its promotional campaign in South Korea. In its press statements, the MBEA director declares: “the difference between Mexican beef and the ones from its northern neighbors is that we do not have BSE or mad cow outbreaks.”

New Zealand is yet another competitor that is active in the export markets. It is the No. 3 exporter to Japan, South Korea and Taiwan behind Australia and the United States, and one of the top exporters to Hong Kong. Exports are critical to New Zealand – as they are to Australia – as it exports about 80 percent of the beef it produces.

“Food safety is an issue that has mobilized people in nations around the world,” explains Hanes. “In Japan, for example, every prefecture that produces beef has elected to perform testing on every animal raised to give consumers a sense of comfort that BSE is not present.”

The situation was similar in Taiwan in the fall of 2009, when Taipei’s mayor led protests against the expansion of U.S. beef access in that nation. Fortunately, the protests were relatively short-lived, and the impact on U.S. beef was minimal. This year, in fact, exports of U.S. beef to Taiwan set a new full-year value record ($172.4 million) through October with two more months to go.

“The continuing challenge for the United States is to utilize checkoff dollars, along with USDA's Market Access Program  support, to maintain and grow its beef export market share to key regions,” concludes Hanes. “While U.S. beef exports to targeted countries, including Japan and Korea, continue to rebound, the greatest opportunities come from expanded access (including raising age limits for beef to Japan and gaining access to China) and concluding Free Trade Agreements (starting with South Korea) that will ease import duties on U.S. beef.”

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