by Katie Micik, DTN Staff Reporter
NASHVILLE, Tenn. (DTN) — Expect beef exports to keep up the record-setting pace in 2012. CattleFax CEO Randy Blach said he expects exports will increase 10{962fe9be9a8a5c386944bfa41f48d98b010325707b70b1fa6182bcabd27c5d7f} but other estimates are more temperate.
In 2011, beef exports increased by 22{962fe9be9a8a5c386944bfa41f48d98b010325707b70b1fa6182bcabd27c5d7f}, crossing the $5 billion mark for the first time. Beef demand is a hot topic at the National Cattlemen’s Beef Association convention here, and strong global demand is expected to help keep beef prices high in 2012.
“That’s a significant jump,” said Matt McKamey, a relationship manager for Rabo AgriFinance, speaking of 2011’s strong exports. “We’re going to see, if things continue down the road that we’re going with the U.S. beef supply, we’re likely going to see those exports continue. Will we improve that much year over year? That’s hard to say. Actions in the economy dictate that on a day-to-day basis and it’s still pretty fragile.”
Danita Rodibaugh, an Indiana pork producer and chairman of the U.S. Meat Export Federation, said she expects the value of beef exports will grow to $5.4 billion this year.
“We’re looking for more moderate growth, in the 4, 5, 6{962fe9be9a8a5c386944bfa41f48d98b010325707b70b1fa6182bcabd27c5d7f} range. We’ve exceeded expectations before and we hope that happens again,” she said.
The free trade agreement with South Korea incrementally reduces import tariffs on U.S. beef and will make it more competitive with Korea’s domestic beef.
Japan also is expected to lift the age limit on cattle from 20 months to 30, probably in the second quarter of the year, Blach said in CattleFax’s market outlook session. Asian countries will continue to drive growth in exports.
“If we can maintain the access to those markets and maintain a working relationship with those countries, then we’re definitely going to be able to have the opportunity, and if the economy can turn around and improve, I would suspect we would see some growth,” McKamey said.
There are some constraints to growth. If the global economy worsens or the value of the dollar increases, it could limit the growth in beef exports. The U.S. cattle herd is the smallest it’s been since the 1950s, and CattleFax’s Brett Stuart said global cattle numbers are expected to stay steady.
Brazil and Australia are adding to their herds. Australia went through a 10-year drought that contributed to shrinking herd sizes and is slowly starting to rebuild. Brazil is expanding to feed its own growing appetite for beef. The country is now the third-largest beef consumer in the world. The U.S. is sixth.
Brazil’s exports dropped 10{962fe9be9a8a5c386944bfa41f48d98b010325707b70b1fa6182bcabd27c5d7f} last year even though the price was up 15{962fe9be9a8a5c386944bfa41f48d98b010325707b70b1fa6182bcabd27c5d7f}. Their primary export markets are the European Union, Russia and the Middle East. There’s room for U.S. exports to expand in those countries. “We’re moving into their kitchen so to speak. We’re taking some of that business,” Stuart said.
Rodibaugh said USMEF is working with Russia to increase the country’s quota for U.S. beef to 600,000 metric tons. But the largest markets for expansion are still Japan and South Korea.
The foot and mouth disease outbreak in South Korea opened large a window for pork exports to the country, Rodibaugh said, but also opened it up for beef.
“There was a void of meat, and it was a good opportunity to encourage those South Korea consumers to try U.S. beef,” she said. “We hope to keep some of that market share.”
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Posted with DTN Permission by Haylie Shipp
