OUTLOOK IN FOCUS: Meat exports set to grow 2-5% in 2014

Published on: Nov 11, 2013

EXPORTS are the difference between profit and loss in the U.S. meat business. That is the blunt – and likely accurate – assessment of Philip Seng, president and CEO of the U.S. Meat Export Federation, an industry coalition geared toward promoting and growing U.S. beef, pork and lamb exports around the world.

Based on the group’s latest projections, beef exports are expected to grow 5% in terms of value next year, reaching $5.8 billion despite a 2.7% reduction in volume. Record prices will both push total sales value higher while keeping a lid on volumes.

For pork, exports were initially predicted to grow as much as 8% in terms of value, but an ongoing outbreak of Porcine Epidemic Diarrhea virus is expected to keep a lid on pork supply growth, and thus exports. Seng said estimates are now for a more moderate 2% export growth next year.

In both beef and pork trade, the continued closure of the Russian market is a critical issue hindering further export growth. Excluding data for Russia, pork exports were down only 1% in 2013, while beef exports were up 8% in volume and 16% in value.

Considering Russia, pork exports are down more than 4.5% in terms of both volume and value, while beef exports are up a mere 1% in volume, though current prices have driven total export value up 10%, to $4.01 billion through August.

"Challenges appear in many forms, including market closures and disruptions, international competition and product oversupply," Seng said. "For example, while the U.S. has enjoyed impressive growth to Hong Kong, we remain locked out of the fastest-growing beef market in the world: China."

China has yet to harmonize its beef trade standards with international guidelines set by the World Organization for Animal Health (known by its French acronym OIE), citing concerns over Bovine Spongiform Encephalopathy, as well as more recent issues relative to beta agonist use.

According to Joel Haggard, USMEF senior vice president for the Asia-Pacific region, China's beef imports are up 800% year over year, signaling that demand is incredibly strong and domestic production cannot fill the market's desire for beef. Unfortunately, he said, the U.S. is shut out of that market, and Australia has earned 50% market share, while China has become Canada's second-largest export market.

Last week the U.S. Department of Agriculture’s Agricultural Marketing Service announced an approved “Never Fed Beta-Agonists” marketing claim as part of its process-verified program, potentially opening the door for beef exporters to court Russia absent a major policy shift by the country. Seng said his organization sees something “meaningful” happening relative to Russia and U.S. beef over the six months.

Listen to USMEF president Philip Seng discuss the outlook for U.S. meat exports in 2014 as part of a special Feedstuffs In Focus podcast series. The Nov. 11 edition features Feedstuffs’ annual special Outlook report and the podcast will focus on a different piece of the outlook puzzle each day this week.