More progress has been made on eliminating BSE-related restrictions for U.S. beef, adding new export opportunities at a time when it is more important than ever to have access to additional overseas markets. In January, South Africa and Israel re-opened to U.S. beef for the first time since the first U.S. BSE case in December 2003, while Colombia lifted its remaining restrictions and is now fully open to U.S. beef.
U.S. beef and beef products from cattle of any age are now eligible to ship to South Africa. U.S. trade officials had been seeking access for U.S. beef in South Africa for some time, but the issue gained momentum in the summer of 2015 when Congress renewed the African Growth and Opportunity Act (AGOA) for another 10 years. AGOA provides duty-free access for imports entering the U.S. from participating African countries, but it was renewed with the understanding that South Africa would eliminate its barriers to U.S. beef, pork and poultry exports.
Through November 2015, South Africa imported just under 50,000 metric tons (mt) of beef valued at $79.5 million. Australia, Botswana and Namibia were the primary suppliers, followed by New Zealand and the European Union. U.S. beef will compete most directly with domestic product (South Africa has significant grain-fed production) as well as imports from Australia. South Africa is a potential destination for U.S. livers and other offal items, but there could also be opportunities for niche volumes of high-quality U.S. beef cuts.
Israel imposes strict kosher slaughter and handling requirements, which will limit U.S. beef export volumes. However, the market could present profitable opportunities for some U.S. companies. On an annual basis, Israel imports about 75,000 mt of beef, mainly from Argentina, Uruguay, Brazil and Paraguay, along with small volumes from Australia and the European Union. Through the U.S.-Israel Agreement on Trade in Agricultural Products, the U.S. has duty-free access for 1,424 mt of chilled beef and 11,994 mt of frozen beef. But the kosher requirements, especially the complicated salting process, could make it difficult to differentiate U.S. forequarter cuts from those produced by competitors.
Colombia has been partially open to U.S. beef since 2004, and exports gained further traction in 2011 following implementation of the U.S.-Colombia Trade Promotion Agreement. But until January, Colombia still banned certain bone-in U.S. beef cuts and beef derived from direct-slaughter cattle of Canadian origin. Now that these restrictions have been lifted, U.S. exporters are no longer required to follow an export verification program for Colombia, which lowers the cost of serving the market. This is important for expanding U.S. market share in Colombia, where U.S. beef faces intense competition from domestic beef as well as imports from Chile, Argentina, Uruguay and Canada.
In 2014, U.S. beef/beef variety meat exports to Colombia reached 3,862 mt valued at $14.4 million – increases of 41% and 58%, respectively, compared with 2013. But exports trended lower in 2015, with January-November volume falling 44% year-over-year and export value declining 30%. The Colombian peso was down an average of 27% against the U.S. dollar in 2015 compared to 2014, which contributed to the slowdown.
Markets that never reopened to U.S. beef following the 2003 BSE case now include China, Australia, Argentina, Brazil and Morocco. Saudi Arabia resumed imports of U.S. beef in 2004, but suspended trade following confirmation of the 2012 BSE case in California.
China’s beef imports set a new record in 2015, reaching $2.4 billion (up 77% year-over-year) with volume increasing 56% to 495,000 mt. The U.S. government is continuing efforts, with input and support from the U.S. industry, to regain access to this critical market. U.S. officials also continue to seek a reopening of Saudi Arabia, where total beef imports exceed 100,000 mt per year, valued at more than $460 million.
Joe Schuele is vice president, communications, with the U.S. Meat Export Federation in Denver, Colo.
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