The U.S. Meat Export Federation Strategic Planning Conference and Board of Directors Meeting, held Nov. 10-12, 2021, in Carlsbad, Calif., wrapped up with a session focused on U.S. red meat’s remarkable success in South Korea and the election of new USMEF officers.
Mark Swanson, chief executive officer of Colorado-based Birko Corporation, is the new USMEF chairman, succeeding Pat Binger of Cargill Protein North America. Since joining USMEF in 2008, Swanson said Birko has benefited significantly from the federation’s expertise and from the contributions exports make to the growth and profitability of the U.S. red meat industry.
“The reason Birko became involved with the U.S. Meat Export Federation is that as a critical supplier to the industry, we know that exports are absolutely vital to the profitability of our customers,” he said. “Birko’s support for our customers is what drove us to assist USMEF in its quest to grow meat exports.
“Probably the greatest aspect of USMEF that has helped Birko, and many of the organizations that we work with, is the technical knowledge and the technical skill of the USMEF staff – which is second to none,” Swanson added. “This is what propels us to outpace the competition, because we’re simply better at understanding the markets.”
Swanson heads an officer team reflecting the wide range of USMEF membership sectors. Dean Meyer, a corn, soybean and livestock producer from Rock Rapids, Iowa, is the new USMEF chair-elect, and Edgerton, Minn., pork producer Randy Spronk will serve as vice chair. The newest USMEF officer is Steve Hanson, a rancher from Elsie, Neb.
Spotlight on Korea: 30 years of growth, with the best yet to come
The conference marked the 45th anniversary of the founding of USMEF and 30 years since it established an office in Seoul, South Korea. Jihae Yang has guided the Korea operation for much of that time, starting with USMEF in 1998 and becoming Korea director in 2006. She gave USMEF members a recap of some of the factors leading to U.S. red meat’s tremendous growth in Korea, which will be a $2 billion destination for U.S. beef exports for the first time this year. High-value chilled exports to Korea are achieving explosive growth, with chilled beef export value up 50% year-over-year and chilled pork volume nearly tripling from a year ago.
Yang explained that booming retail demand has been the main growth driver in Korea, with consumers seeking more high-quality protein options to prepare at home. She emphasized that the U.S. red meat industry has capitalized on this trend in a big way, but not just in supermarkets and other traditional retail outlets. Before COVID-19, Korea was already a pacesetter in U.S. meat sales through e-commerce platforms and home delivery, and the popularity of these services has grown tremendously during the pandemic.
Koreans still enjoy dining out, and Yang noted that the recent easing of COVID-related restrictions on restaurants and cafes will help foodservice demand rebound. However, she expects dine-in traffic to remain below pre-COVID levels for some time as consumers continue to explore a widening range of convenient, high-quality, in-home meal options.
Panelists provide expertise on logistics challenges, regulatory burdens
Thursday’s agenda included a panel discussion focused on the obstacles U.S. exporters face when moving chilled and frozen product through West Coast ports. The session featured insights from Port of Long Beach Chief Operating Officer Noel Hacegaba and veteran logistics journalist Bill Mongelluzzo, trans-Pacific senior editor at Journal of Commerce.
Hacegaba explained the steps the Port of Long Beach has taken to improve the flow of the surging volume of containers carrying imported cargo, which face several bottlenecks between U.S. point of entry and their final destination. This includes expansion of port operating hours and the recent imposition of dwell fees assessed on inbound containers that are not picked and removed promptly.
“As you can imagine, there is a lot of outcry about what are we doing,” Hacegaba said. “Why are we assessing additional charges at a time when they need relief? Well you can’t let the terminal, or even the ships at anchor, serve as warehouses – and that’s effectively what they’re doing. We need to get those boxes out, and since we made that announcement, those boxes that this surcharge targets are down 20% at the Port of Long Beach, and this shows there is still room for improvement.”
Mongelluzzo noted that media outlets too often describe current shipping difficulties as “gridlock,” which misrepresents the situation and draws attention only to the number of vessels waiting at anchor.
“Gridlock means nothing is moving, when in fact the Port of Long Beach and other ports are moving record or near-record volumes of cargo every month,” he said. “This has gone on for 16 consecutive months beginning in July 2020. The big issue right now are the warehouses – not just in Southern California where there’s close to 2 billion square feet of industrial space. You name the gateway – New York, New Jersey, Norfolk, Savannah – and these warehouses are totally and completely packed.”
Hacegaba and Mongelluzzo both cautioned that it is difficult to estimate when U.S. exporters will see significant improvement in the shipping industry’s ability to move their cargo to overseas destinations. Projections range from early 2022, when the Lunar New Year holidays tend to slow the volume of imports arriving at U.S. ports, to late 2022 or early 2023. The uncertainty is a growing concern for international customers who rely on prompt delivery of U.S. beef and pork.
“While global demand for U.S. red meat is surging and exports are on a record pace this year, the severity of these transportation challenges can’t be overstated,” said USMEF President and CEO Dan Halstrom. “It’s a huge concern for our members throughout the supply chain, and the panelists gave great insights on the complex and difficult situation we face on the West Coast.”
To help voice these concerns, USMEF members approved a resolution pledging to work with meat and livestock industry partners to seek solutions to current logistical challenges across the supply chain. USMEF also supports ongoing efforts between industry and the U.S. government to pursue long-term improvements to the transportation infrastructure that will help U.S. agriculture remain a reliable supplier to its global customer base.
The conference also included a panel discussion examining regulatory challenges for American and European agriculture, featuring Christine McCracken of RaboResearch Food and Agribusiness and Rupert Claxton of global consulting firm Gira. McCracken reviewed broad factors contributing to demand – including global income growth, an expanding middle class and increased demand for high-quality protein – and the major factors constraining supply. She explained that increased regulation, supply chain disruptions and geopolitical risks are serious supply-side threats to trade and to the U.S. industry’s ability to capitalize on demand opportunities.
Citing California as an example, McCracken explained that the country’s leading producer of agricultural products is the most heavily regulated state in American agriculture – with water, labor and animal welfare regulations topping the list. She detailed the potential impact of Proposition 12, which expands housing requirements for breeding pigs, laying hens and veal calves and affects all fresh pork sold in California, regardless of origin. Final rules are not yet available, which has limited the industry’s ability to prepare for compliance. McCracken expects that after the initial disruption, pork prices will be driven 5% to 10% higher in California and pork consumption will decline slightly, with lower-income consumers being the most impacted.
Claxton reviewed what he termed a “stack” of issues challenging the European meat industry. He stated that COVID has had a more pronounced impact in Europe than in the U.S., and underscored numerous challenges linked to Brexit, including energy and labor shortages.
The EU’s Farm to Fork Strategy – a component of the European Green Deal – includes aggressive 10-year targets that will add to agricultural production costs. Claxton believes European pork production has peaked and that implementation of the Green Deal could accelerate its decline – possibly dropping 10% over the next 10 years.
In addition to the resolution on logistics challenges, USMEF members also approved a resolution urging USDA support for the U.S. Swine Health Improvement Plan pilot project. With African swine fever (ASF) and other foreign animal diseases being a growing concern for the U.S. red meat industry, the resolution highlights the urgent need for funding support for ASF prevention and preparatory efforts.
The Strategic Planning Conference also included meetings of USMEF’s standing committees – the Pork and Allied Industries Committee, Beef and Allied Industries Committee, Exporter Committee and Feed Grain and Oilseed Caucus. Committee members received updates from USMEF’s international staff on market conditions and promotional activities in a wide range of regions, including Korea, Central and South America, the Caribbean and Europe.
Highlights from the Nov. 10, 2021, opening general session are available in this USMEF release. USMEF members will next meet at the federation’s spring conference, which is set for May 25-27, 2022, in San Antonio, Texas.
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