Quality remains the main advantage for the US red meat industry
Facing a skyrocketing demand for home meal replacement items and other convenience foods in several key export markets US Meat Export Federation (USMEF) is counting on the quality of the meat to create loialty among consumers, as Dan Halstrom, President and CEO of declared in an interview for EuroMeat News.
Even if the trade war with China has set some barriers for US red meat exports in this market, access is not completely lost and figures in pork exports recorded this summer gives hope for a strong comeback of US red meat when those issues are to be solved by both parts involved, argues Mr. Halstrom.
Currently, the US is capitalizing on strong demand for red meat in Asia and several other markets. However, a decline in exports to China has impacted the industry. What other options do you have to replace China and where do you see opportunities to open new markets or expand the ones existing already?
Pork exports to China actually trended upward this summer, increasing substantially year-over-year in June and setting a new monthly record in July. Both U.S. pork and beef are at a disadvantage in China due to retaliatory duties, but even with this extra burden U.S. red meat is making its way into China. However, the U.S. industry will be better positioned to serve the Chinese market if we can get back on a level playing field with our competitors.
As for diversification of export markets, this has long been a priority for USMEF and the U.S. red meat industry. Even when access to our mainstay markets was unencumbered, USMEF worked to expand demand in regions such as Central America, South America, Southeast Asia, Oceania and Africa. Although the majority of our exports still go to larger markets in North America and North Asia, having a broad range of destinations for U.S. red meat benefits everyone in the U.S. supply chain.
The current ASF situation in Asia and Europe creates the premises for a major shift in meat consumption. How is that going to influence the development of the red meat industry for the mid and long-term? Do you foresee an animal protein shortage in the market for the following years?
ASF hasn't seemed to significantly cut into Europe's pork production, and Europe's consumption of pork was already fairly flat before ASF became a prominent issue. One major impact of ASF in Europe is that it forced the EU to diversify its export markets following closure of the Russian market back in 2013. This led to the EU taking a more aggressive approach in Asian markets, especially Japan, China and South Korea.
China's ASF-related hog losses could certainly lead to a pork shortage in that region, and in fact, this seems to be materializing as evidenced by the sharp rise in China's hog prices. Whether this prompts any significant shift in consumption remains to be seen, as Chinese consumers are traditionally quite loyal to pork.
At this time, China accounts for 25% in the global meat trade but it is not the only country affected by ASF. What is the worst scenario that you have in mind regarding the ASF situation in Asia?
For everyone in the livestock and meat business, ASF is a huge concern and its containment and eventual eradication is the top priority. For the U.S. industry, we are obviously most focused on keeping ASF out of the Western Hemisphere and out of North America - though we also want to add that ASF is certainly a problem we would never wish on anyone, anywhere.
What are your hopes regarding the evolution of the European market for American beef and how do you intend to take advantage of the new quota in the following years?
USMEF will continue to promote U.S. beef in Europe as a premium product that provides a unique and delicious dining experience. Once the U.S.-specific quota is implemented, we will have more opportunities to expand the customer base and introduce U.S. beef in a wider range of foodservice and retail venues. We anticipate significant growth, as European demand for U.S. beef definitely exceeds available capacity under the duty-free quota as it is currently administered.
Brexit has stirred waves of uncertainty in the world and continues to do it. For the US red meat industry, a no-deal scenario is going to represent a major factor of disruption in trade? For how long?
Brexit could create additional opportunities for U.S. beef in the UK, but this will, of course, depend on what kind of access is secured once the UK leaves the EU. As for the remainder of Europe, our goal is to capitalize on the momentum of the U.S.-specific beef quota and eventually create additional opportunities for U.S. pork.
In the last interview for our magazine, you mentioned that USMEF is focusing on the Middle East market? What notable achievements you have obtained lately in the region?
Although not precisely in the Middle East, new market openings for U.S. beef over the past year include Morocco and Tunisia. U.S. beef is also back in the Saudi Arabian market after a BSE-related absence. Exports to Saudi Arabia are up substantially in 2019, although import restrictions make this a somewhat difficult market to serve and export volumes are still not back to the levels we were shipping prior to the market closure.
New trends in consumption emerged in different markets and helped create new opportunities for meat exporters to diversify their offer. How important are trends such as online shopping, convenience, ready-to-eat for the US meat industry and what do you foresee for these channels?
Demand for home meal replacement items and other convenience foods is skyrocketing in several of our key export markets, and this trend is expected to accelerate. It's important to note that while customers love the convenience these products offer, they do not want to sacrifice quality – and that's great news for the U.S. meat industry because we are well-positioned to offer an excellent range of high-quality, economically priced beef and pork cuts that will make these items very attractive to consumers.
The US cattle herd seems to have reached a peak in expansion. What impact it will have on your industry in the next couple of years?
The cattle cycle may lead to tighter supplies in the next couple of years, but our focus is to continue expanding global demand for U.S. beef. When demand is strong both domestically and internationally, producers respond in a positive way. With this in mind, the next upward trend in herd expansion may not be far off.
Traceability is one of the pressure points when it comes to selling abroad. What is the current situation with the traceability program in the US and how important is going to be this issue in the next couple of years?
Many U.S. producers have capitalized on value-added programs that incorporate traceability. One example is USDA's non-hormone treated cattle (NHTC) program that ensures compliance with the EU's import requirements. Traceability can also be a factor in meeting the needs or standards of specific customers, whether in the domestic or international marketplace.
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