The U.S. Meat Export Federation recently led a trade mission to Japan, looking to increase marketing opportunities for U.S. red meat producers, and the timing couldn’t have been better.
Japan and the U.S. recently announced an “agreement in principle” on trade, which would include U.S. agricultural products. USMEF President and CEO Dan Halstrom said America has a great opportunity for increased trade with Japan.
“Without a doubt,” he said. “We were at about $2.1 billion in sales last year and basically steady with that number here through the first seven months of 2019 even though we had no trade deal in place. The muscle meats face a 12% higher duty than imports from some of our top competitors like Australia and Canada.”
Halstrom said if U.S. producers can get on a level playing field, America would have no problem exceeding last year’s export numbers by “quite a bit” in several economic sectors.
“You have the national retail sector, the regional retail sector, there’s food service, you have convenience stores, and all the sectors are growing generically. If we can level the playing field, we’ll get a big share of each sector.”
Rosemary Anderson is a beef producer and member of the Nebraska Beef Council’s Board of Directors who took part in the trade mission. She runs a beef operation south of Whitman, Neb., in southeastern Grant County. She said Japan can’t produce all the beef it consumes, which means Nebraska producers have a great opportunity to fill in the gap.
“Japan only produces about 36 percent of the beef that they need,” she said. “I feel like that’s a big opportunity for Nebraska beef producers. Right now, America can’t compete with countries like Australia because U.S. beef faces a much-higher tariff rate. When that tariff reduction eventually goes through, it will definitely level out that playing field.”
Nebraska (and U.S.) beef is still making its way into the Japanese market in spite of being at a price disadvantage. Anderson said that’s due to the hard work of American beef farmers, who produce the highest-quality product in the world. However, there’s room for the U.S. to grab even more market share.
“A lot of it is due to the face that Japan is a pretty affluent nation,” Anderson said. “Income levels seem to be rising and it seems that consumers and retailers are seeking out the higher-quality grain-finished beef products they can’t always get from Australia. They can sure get what they’re looking for from America.”
Pork is an important protein source in Japanese diets. However, American pork faces an 8% tariff disadvantage in the Japan marketplace.
Tim Chancellor is President of the Nebraska Pork Producers Association. He took part in the trade mission to Japan and said his group is very excited to hear about a pending agreement with one of America’s most important trading partners.
“The people we spoke to in Japan say they’re hoping the agreement is signed and passed soon enough to put it into effect on Jan. 1,” Chancellor said. “That would be huge because this agreement will put us on a level playing field with our chief competitors.
“I was in Japan four years ago when we were working on the Trans-Pacific Partnership,” he said. “TPP was a great thing at the time. What it did was put us level playing field 14 years after the agreement went in effect. If we can get this bilateral trade deal in place, that just took 13 years off of leveling out the Japanese playing field. That would be amazing.”
In spite of the disadvantages, Halstrom said U.S. red meat is still doing well in the Japan market.
“In certain segments of Japan where the price is more important than quality, the Australians and our other competitors have an obvious advantage because we have a higher tariff rate,” he said. “As it relates to foodservice and high-end retail sectors, I think even though we have a duty disadvantage, it proves that Americans want U.S. products.”
Face-to-face trade missions like this one put together by the USMEF are and will continue to be, a vital way to ensure continued market share for U.S. red meats.
“One of the biggest retail outlets in Japan told us we could send 10,000 emails and they won’t answer a single one,” Chancellor said. “A face-to-face meeting where we can get to know you and learn to work together is invaluable to us.”