Pierce cautious about recovery of U.S.-to-Asia beef market
Albert A. Pierce, managing director of the Westbound Transpacific Stabilization Agreement, gave a cautious assessment of the U.S.-to-Asia beef export market at the Agriculture Ocean Transportation Coalition meeting, saying there was no certainty that Asia’s import bans caused by meat infection will be lifted soon.
“Prior to the bovine spongiform encephalopathy (BSE) finding in the U.S., producers exported a record 860,000 metric tons of beef and related products worldwide, valued at a record $3.1 billion,” Pierce said. “This year, beef exports are projected to fall below 200,000 metric tons, valued at under $1 billion.”
Nearly all of the decline in beef exports is caused by the loss of markets in Asia.
“Poultry exporters are faring somewhat better, with the announcement that Hong Kong will begin admitting U.S. poultry shipments following the avian flu scare earlier this year,” Pierce said. Over January-February, U.S. poultry exports worldwide were down 12 percent in volume, but up 17 percent in value.
The carrier executive said U.S. Department of Agriculture forecasts point to an improvement in U.S. export volumes for fruit, produce, cotton, soybeans and dried fruits and nuts, offset by losses in beef and poultry for a large part of the year.
Last winter, after Asian countries suddenly banned U.S. imports, more than 2,200 refrigerated containers loaded with beef for Japan and Korea were stranded in port, returned to the United States, rerouted to third countries or destroyed.
“Fortunately, poultry exporters had enough warning and did not have the same experience of stranded cargo and spoilage,” Pierce noted. In May, Hong Kong lifted part of its ban on U.S. poultry for producing states where avian flu was not reported.
“Beef and poultry pose a unique dilemma for both carriers and shippers in the current market,” Pierce said. “Bans on U.S. beef due to BSE, and on poultry because of avian flu, remain in place throughout much of Asia, including the major markets in Japan, Korea and China.”
He said carriers worked closely with customers in the weeks following the beef bans in late December, and the poultry bans in January. Carriers extended free-time allowances at Asian ports and offered preferential space and rates on eastbound sailings.
Pierce cited reports of a possible compromise between U.S. and Japanese authorities on beef, to maintain the ban on “special risk materials” cuts such as T-bone steaks, while relaxing restrictions on less expensive cuts used in beef bowl and noodle shops.
“But negotiations have had several false starts to date, and the U.S. and Japan remain far apart on the need for an ‘all-test’ regime,” he warned. “So we just can’t say with any certainty.”
Exports account for 10 percent of total U.S. beef production. In 2003, U.S. shipments of beef and related products to Asia amounted to more than 78,000 forty-foot equivalent units, Pierce said.