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Feeding Asia's appetite for beef, poultry, eggs with U.S. exports

ST. LOUIS, Mo. — The United States will again become the biggest source of beef imported by South Korea, and demand for U.S. poultry products is also likely to persist in Korea and throughout Asia, where avian influenza continues pressuring production.

South Korean trade data for 2017, reported last month by Reuters, show U.S. beef imports exceeded the same-year volume from Australia for the first time in 15 years. American beef volumes to South Korea plummeted in 2003, when the country banned U.S. beef because of concerns over bovine spongiform encephalopathy, or “mad cow” disease.

Korea is a Top 5 beef importer and became a billion-dollar market for U.S. beef products in 2016. Value and volume of U.S. beef shipped to Korea increased after the South Korea-U.S. Free Trade Agreement, or KORUS, began a tariff reduction on U.S. beef.

“By 2017, the tariff, which had been at 40 percent, was down to 24 percent and is scheduled to be eliminated by 2026,” said Kathy Baylis, a University of Illinois economist, in a November analysis of KORUS.

The U.S. Meat Export Federation (USMEF) reported that beef exports to Korea set a value record in 2017, with $1.1 billion through November. That is an 18 percent increase in export value and a 4 percent volume rise in 2017 over 2016 – with December’s total still yet to be reported.

“Chilled beef exports to Korea accelerated at an even faster rate, jumping 88 percent in volume to a record 41,086 metric tons – valued at $368.5 million, up 93 percent,” stated the USMEF, which expects beef volumes and value to Korea to only continue increasing.

South Korea is not the only Asian market showing a hunger for U.S. beef. Japan continues to lead the region, with $1.75 billion of product imported for 2017, through November. Chilled beef exports to Japan reached a record value last year, according to USMEF.

Exports were also strong to Hong Kong, Philippines, Vietnam and Taiwan, where U.S. beef has 70 percent of the chilled beef market, according to the federation.

China also continues to provide promise for beef exporters. The country opened to U.S. beef in June 2017, with about $23 million shipped to China through November.

“U.S. beef has only really scratched the surface in China, so exports are still relatively small but the value per pound is among the highest in the world,” explained Dan Halstrom, USMEF president and CEO. “This makes China an exciting addition to our strong portfolio of Asian markets, where beef exports continue to expand at an impressive rate.”

Egg and poultry trade

Asia also continues to be a growth destination for U.S. eggs and, in some countries, poultry meat. The main factor in 2017 was continued pressure from avian influenza in Asian poultry facilities.

South Korea showed the most dramatic increase in U.S. egg exports in the region for 2017. Eggs and egg products exports there approached $20 million through November, after Korea opened to U.S. shell eggs during an avian influenza outbreak in the Korean hatching flock last winter.

Korea was recently only a $2 million-$3 million market for U.S. egg products, mainly dried egg products and hatchery eggs.

Elsewhere in East Asia, egg product exports to Japan increased 18 percent in value and 26 percent in volume. Japan is now a $50 million market for U.S. egg products, with nearly all that value in dried and frozen product. Dried egg exports increased substantially to Japan last year.

Egg exports in October were 15 percent higher than the year previous. “Continuing growth in shipments to Asia drove the export growth, with 1.9 million dozen to both Japan and Hong Kong and 900,000 (dozen) more to South Korea,” stated the USDA in December.

That same trend for egg exports continued in November. Shipments of all egg products to Japan rose by about 4.7 million dozen in November, compared to 2016, and by 1.1 million dozen to South Korea. Those increases helped boost total U.S. egg product exports for November to 30 million dozen – up 19 percent from 2016.

Poultry meat exports to East Asia from the United States were less impacted by bird flu outbreaks. East Asia is the region defined by the USDA as China, Hong Kong, Japan, Korea and Taiwan. Value of poultry exports to the region were up about 10 percent through last November, based mainly on more volumes to Taiwan and Hong Kong.

Broiler exports to Taiwan showed strength in October and November, according to the USDA. Exports to Vietnam and Philippines were also strong in November. Strength in meat exports to markets impacted by supply disruptions from bird flu, including Asian countries and South Africa, helped boost final expected export numbers.

“Expectations for (broiler) exports for fourth-quarter 2017 were increased by 70 million pounds,” said Sean Ramos, USDA Economic Research Service, in the January Livestock, Dairy and Poultry Outlook.

Total U.S. exports of eggs for 2018 are projected by USDA to be 320 million dozen, a slight decrease from an estimated 323 million dozen in 2017. The January USDA estimate projected 2018 poultry meat exports at 1.14 billion pounds, a 40 million-pound increase over the December estimate.