Asia - Profit potential in the meat business  Keith Miller

Keith Miller is a cattleman and Kansas Farm Bureau board member.
He also serves as Vice-Chair of the United States Meat Export Federation (USMEF)

October 1, 2009

There is a lot to do in the Asian markets. I have been traveling around Asia with part of a trade team from USMEF consisting of the top three officers and staff, working on getting our beef and pork moving. We have spent nearly two weeks in China, Korea and Japan. We have been meeting with Government officials, traders, restaurant owners,  and packers to see what we can do to help our exports.

The first week in China, we met with government officials and talked about access issues  and what to do about them. We spent a lot of time talking about H1N1 and the pork import ban.   We also saw traders and answered questions they had.

Later in the week, we took a six hour train ride across the country. This allowed us to see their agriculture and rural countryside.  The corn looks great there and it is all hand cultivated. We attended the world pork conference in Qingdao.  I met pork exporters from 30 countries.  One thing I learned is China has 45% of the world pork production.   As the economy improves this is still not enough to feed its 1.3 billion people.  China also can't produce enough of other commodities for its population, as we say that much of the land is mountains or desert and won't produce crops. There is a huge opportunity for the U.S. to export our products there.  In the future this should be our largest market if our governments can get along.  

We then flew to South Korea, where more than 60% of its food is imported.  Most of the countryside is mountains. We have access there but the Koreans have a terrible attitude towards the U.S., however,  I was in Korea in March and the attitude has improved greatly since then.  Older people want U.S. products but the younger generation doesn't 'trust' the U.S.  Using the internet with the help of bloggers targeting youth is helping.

Finally, in Japan, we are still plagued with 'beef under 20 months' restrictions. We have to change that somehow.   The U.S. had a pork expo to show off various pork products.   I met with a lot of importers that want our pork and beef, but they feel the U.S. government is 'stubborn' on issues important to them.  Japan also imports 60% of its food. It is the size of California and has half the population of the entire US.  The market potential clearly exists. 

One concern I have heard in all three countries is the lack of traceability in the U.S.   If we want to export to this market, we will have to get animal ID somehow.   We are the only major exporting country that does not have mandatory animal ID.   If we want to sell our products the customer is demanding that we have traceability.

The group went to Washington, D.C. to brief our government of what we heard and saw in the Asian markets.  We met with Senators, Representatives, USDA, Under Secretaries, USTR, FAS, NCBA, NPPC, AFBF, and we concluded with Ambassador Kirk, who is in charge of all foreign trade for the U.S. 

Our goal was to make them aware of the issues and the problems that are keeping our products from being exported to these countries.  We told them we repeatedly heard about the lack of engagement by the U.S. government in proceeding with trade talks.  With one of the hottest issues in D.C. being stimulus, we explained to them that opening these markets would be one of the single best stimulus plans for rural America ever.  USMEF and USDA estimates that opening these three markets fully would make a $2 billion difference for rural producers.  Think of the trickle down effect that would have on all of America.  That message was understood clearly by the people we visited with this week.   

I learned a lot about our markets and how they work overseas.  It is a complicated process, but we do have great potential to make American agriculture more profitable.  In these times of sinking prices for commodities produced by American farmers and ranchers, every bit of new export will help the bottom line of all people involved in food production in America.

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