Economic meltdown hinders US pork exports
Limited credit availability, volatile currency exchange
rates and global economic uncertainty will create an uphill climb for US beef
and pork exports in many foreign markets for the remainder of the
This was common theme provided by directors of the US Meat Export
Federation's (USMEF) international offices at the USMEF Strategic Planning
Conference in Tucson, Ariz. Despite these obstacles, however, both products have
performed extremely well in 2008, and are well-positioned for continued
Greg Hanes, USMEF Japan
director noted that seafood consumption is trending downward creating
opportunities for red meat. The strength of the yen against the US dollar and
most other currencies also has enhanced Japan's appetite for imported products.
Through August, US pork exports to Japan have increased 29 percent in value over
the same period last year, while beef exports have increased 64 percent. But the
market holds even greater potential if market access can be
According to Hanes, Japan's gate-price system for imported pork
hinders imports to some degree by moderating the current purchasing power of the
yen. But that obstacle is not likely to go away until further progress in made
in the Doha round of the World Trade Organization negotiations.
Other markets have been much more
heavily impacted by economic conditions and the surging value of the US dollar.
South Korea, for example, has had a sluggish economy, and the Korean won has
performed poorly in 2008 versus the US dollar. Still, Korea has increased its
imports of US pork by 47 percent in volume and 28 percent in value over last
Russia – a rapidly emerging market for
both US beef and pork – has also been slammed by the devaluation of its currency
as well as a severe drop in oil revenues and other economic issues.“Russia is
oversupplied and overstocked,” said John Brook, USMEF director for Europe,
Russia and the Middle East. “There is a period of correction going on, which
could last several months.”
Still, Brook is very excited about the
prospects for US beef and pork in Russia, as evidenced by their performance in
the first eight months of 2008.
Mexico is currently the largest foreign market for US beef and
third-largest for US pork, but the recent devaluation of the peso has caused
exports to slow from the record-breaking totals reached earlier in the year.
Joel Haggard, USMEF senior vice
president for the Asia Pacific region, discussed the massive increase in US pork
exports that entered China during the first half of 2008, and the reasons behind
a recent slowdown.
With regard to China, the slower pace of pork exports
appears to be more related to shifts in China's policy priorities rather than
current economic conditions.
Another factor USMEF is watching closely,
Haggard said, is the food safety problem China has experienced with melamine
contamination. While this issue is not related to US imports, it remains to be
seen if it will cause any consumer backlash with regard to livestock-related
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