The U.S. Meat Export Federation (USMEF) board of directors meeting in Washington, DC, had an optimistic tone – well-deserved considering the record pace U.S. beef exports have established so far in 2011. But the discussion also highlighted the critical importance of exports in a period of very high agricultural production costs, and included reminders that the industry is still being held back by a number of obstacles and trade barriers.
USMEF Chairman Keith Miller, a farmer-stockman from Great Bend, KS, emphasized that the premiums derived from beef exports are especially critical to livestock producers at a time of record-high production costs.
“Without exports, think about how you would pay for the $4/gal. diesel fuel I’ve been buying lately, or the $700 anhydrous ammonia I just paid the bill for last week,” he says. “Or the $7/bu. corn to feed our livestock. We couldn’t do that if we didn’t have meat exports. That’s where the premiums are coming from that help pay those costs.”
U.S. Sen. Max Baucus (D-MT) addressed USMEF members on the importance of removing trade barriers and giving U.S. products a more level playing field.
“This year, farm exports are on pace to exceed $130 billion, with a trade surplus of nearly $50 billion,” Baucus says. “But this success isn’t final. Our competitors are gaining ground. We must stay focused on the task at hand, removing barriers and opening new markets for our farmers and ranchers.
“Congress is poised to approve free trade agreements (FTA) with three important partners – Colombia, South Korea and Panama,” Baucus says. “It’s estimated these agreements, once implemented, will increase U.S. exports by more than $12 billion and increase our gross domestic product by more than $15 billion. These three FTAs are being readied for Congressional approval. We are holding hearings and drafting implementing legislation. But we’re not there yet – our success is not final.”
Baucus has resisted ratification of the U.S.-Korea FTA due to barriers that limit access for U.S. beef in Korea, but says recent developments have drawn his support for the agreement.
USDA Secretary Tom Vilsack also addressed the meeting. He says the $75 billion in agricultural exports in the first half of this fiscal year were the best six months in the nation’s history, and that this success is a major boost to the U.S. economy.
“But we’re not going to stop – we’re not going to be satisfied with this level. Every $1 billion of ag sales generates 8,400 jobs. So when you see a dramatic increase in the number of ag exports, and you see an increase in private-sector job growth and you see a recovering economy, I think it’s not much of a stretch to make a link that ag is helping the country move its way out of the deep recession it was in.”
The guest speaker for the closing general session was Ambassador Isi Siddiqui, chief ag negotiator for the Office of U.S. Trade Representative. Siddiqui addressed the mainland China, noting his disappointment that this potentially lucrative market remains closed to U.S. beef.
“We will continue to engage China – we made some progress,” he says, referring to trade negotiations held in early January. “I was disappointed we weren’t able to open that market, which has tremendous potential in terms of export opportunities.”
He says China’s desire to exclude certain offal products was one stumbling block preventing a trade protocol from being reached, but also cited issues concerning border protection, traceability and China’s insistence that beef from fed cattle of Mexican origin be excluded.
USMEF estimates that upon reopening, China would immediately emerge as a $200-million annual market for U.S. beef.