While U.S. meat exports face imposing challenges in 2015, this hasn't dampened the industry's enthusiasm for international marketing. This was the prevailing theme throughout the U.S. Meat Export Federation Board of Directors Meeting, which concluded Friday in San Antonio, Texas.
"The mood is very positive, despite all the challenges we have faced in the first few months of this year," said USMEF Chair Leann Saunders. "We heard a lot this week about the large volume of protein that's going to be entering the market in the next 10 years, and our members know the international markets are essential to their ability to move that protein into the value-added marketplace."
Red meat exports endured a difficult first quarter in 2015, slowed by West Coast port congestion, intense competition in key markets and a very strong U.S. dollar. But Saunders said USMEF members are still confident in their investments in international marketing for beef, pork and lamb.
"They are definitely in this for the long haul and understand this is not a sprint, but a marathon," she said. "It's really been a pleasure to interact with USMEF members this week and see the positive outlook they have for the future of our industry."
Meat update from USDA
During the opening session, Al Almanza, deputy undersecretary for food safety at USDA, provided status reports on a number of issues that have recently interrupted U.S. meat exports, including delisting of pork plants by China.
Amanza noted that USDA Food Safety and Inspection Service staff members have prepared detailed responses on each establishment for review by Chinese regulators, documented the corrective actions taken, and asked that the plants be reinstated immediately based on FSIS's review.
Almanza also discussed disruptions at the U.S.-Mexico border that have resulted in delisting of some U.S. plants. He said USDA is working with Mexican officials to develop protocols allowing them to work together to avoid these situations in the future.
Almanza was also asked about efforts to improve market access for U.S. lamb, which is currently shut out of several key markets due to restrictions dating back to the detection of BSE in the United States. He responded that USDA expects to see progress on this issue within the next two months.
Industry perspectives panel
In an industry perspectives panel discussion, representatives of the beef, pork and lamb industries shared their thoughts on the importance of red meat exports to producers, as well as the challenges faced by their respective industries.
Panelists were Cattlemen's Beef Board CEO Polly Ruhland, National Pork Board CEO Chris Hodges and Greg Ahart, vice president of sales for Superior Farms and a member of the American Lamb Board.
Ahart noted that the lamb industry has recently stepped up its efforts to increase exports. Unlike U.S. beef and pork, the U.S lamb industry isn't focused on growing international markets, Ahart explained. Right now it's all about simply getting access to markets.
"The cow that stole Christmas also stole Japan from the U.S. lamb industry," Ahart said. "As beef trade was restored into Japan, lamb was not."
Hodges explained the impact of porcine epidemic diarrhea virus and how the pork industry is dealing with it. PEDV caused the pig crop to drop dramatically in 2014, while the breeding herd surged because the outbreak led producers to think they would need more sows to maintain their level of production.
"The other thing that happened was that we had record profits in 2014, which led to expansion," Hodges said. "Kind of odd, isn't it? We had the worst disease in history, and we walked out of 2014 with profits we had never seen before. Welcome to the pork industry."
Increased U.S. pork production requires an emphasis on increasing pork exports, Hodges said.
"If our production is going to go up 6 to 7%, exports are going to be very important, because Americans can't consume that much pork," Hodges said.
He also pointed out that the West Coast port backlog hurt the pork export business, especially to key markets like Japan, which is a tremendous market for U.S. chilled pork.
Ruhland said the beef industry has been challenged by the decline in the cattle herd because the beef checkoff is assessed per head, not by pounds or value produced.
"But at the same time, the foreign marketing budget has increased," she said. "We realize in the beef industry that we have to operate in the global community in order to retain the sustainability, particularly the economic sustainability of U.S. beef producers. The global community is becoming even more important to beef as we move forward and as we rebuild herd."
When it comes to international marketing, it's important for the beef industry not to put all its eggs in one basket, Ruhland added.
"In the long term, we need to balance our portfolio internationally," she said "We must have a good mix of emerging markets, mature markets and a product mix that allows us to be balanced."
Ruhland said the beef industry has a strong belief in partnerships, whether with retailers, foodservice providers or others in the supply chain, but its most important partnership is with consumers – both domestically and globally.
"Consumers are where it all ends. They drive the purchasing, so we need to listen to their needs worldwide."
On trade with Cuba
The USMEF Board of Directors approved one new resolution at Friday's business session, which related to trade with Cuba. While the resumption of diplomatic relations has raised expectations about expanded agricultural trade opportunities in Cuba, USDA program funding and checkoff funding cannot be utilized for any market research or promotional activities.
The USMEF resolution encourages member organizations that favor expanded trade with Cuba to advocate for a change in this policy.
"USMEF is not a lobbying organization, but we are hopeful that agricultural associations that do have a strong lobbying presence will work in favor of this policy change," Saunders explained. "This would help put USMEF in a better position to examine the Cuban market and assist companies interested in exporting beef, pork or lamb to Cuba."