I’m headed to Taiwan on Saturday for the last two weeks of my Eisenhower Fellowship experience. I’ve been blessed thus far by timing (UTM rule in February for Japan, export growth to Taiwan) and relationships (the EF network and the generous assistance of U.S. Meat Export Federation (USMEF).
I’ve had some questions about why I chose Japan and Taiwan for my Fellowship trip. USMEF reports that U.S. exports to Taiwan already show strong recovery in 2013, rebounding after a setback over beta agonist use in 2011 and 2012. Taiwan set an MRL (maximum residue limit) in September, 2012 for both domestic and imported beef, and that set this market up for growth. Through February exports to Taiwan were 16 percent higher than a year ago in volume (5,708 metric tons) and up nearly 40 percent in value ($42.6 million). This is the fastest pace ever for beef export value to Taiwan.
Take the UTM (under thirty month) rule for Japan and the clear potential in Taiwan together, and, (because this is my blog and I can say what I want to), I offer you this: If you’re in the beef industry, and you don’t see the potential for increased profitability in U.S. producer pockets in these two countries, and indeed in international markets as a whole, I highly recommend an eye exam. U.S. producers have much to offer consumers around the globe.
For example, many Japanese consumers prefer higher quality domestic beef but I’m hearing experts (packers, importers, distributors, retailers, foodservice) recognize a definite gap in products available to Japanese consumers–and many want the U.S. to fill that gap. The gap nestles in below domestic product and above product we successfully provide to Japan for Gyudon rice bowls (short plate, for example). The gap includes valuable U.S. middle meats from the upper two-thirds Choice and Prime categories. Frankly, the Aussies may not be able to fill the gap effectively, because 1) even their long-fed beef is more unpredictable quality-wise than our branded programs with specs for quality grade in upper two-thirds Choice and Prime, and 2) they can’t meet Japanese demand for specific cuts in quantity. We have a wide open playing field here, should U.S. companies and producers choose to rise to the challenge.
Yes, international markets may fluctuate with trade access issues (there’s a slight chance of rain on a weekend you plan a camping trip–does this mean you give up and never plan a camping trip?!). Yes, our domestic consumers eat most of what we make and we cannot ignore them (Huge kudos to our checkoff contractors National Cattlemen’s Beef Association, American National CattleWomen, National Livestock Association and North American Meat Association. They do an excellent job of keeping our domestic marketing based on research, fresh, lively and effective.)
However, I strongly encourage U.S. producers to take a longer term view of our supply and demand situation, and our active role in beef demand. I’ve heard time and again how producers are price takers, not price makers (said with an enormous sigh when discussing prices, usually). I frankly get a little frustrated by this statement. Unless you’re an economist and you’re explaining market basics in a lecture, saying we are “price takers” seems an excuse for lackadaisical behavior–a reason to sit back, take what’s given and ignore (or even argue against the checkoff’s stellar work on behalf of beef producers!) opportunities to increase our potential for profit. While we have a product shortage in the U.S. now, that won’t always be so–growing international markets means the industry could support increased production while maintaining a decent price for all segments of the industry as our supply grows.
“If you reject the food, ignore the customs, fear the religion and avoid the people, you might better stay at home.” ~ James A. Michener
The trick remains our ability to put aside our own opinions, desires, and frames of reference, and see each market as a separate culture, people and environment for our offerings. Our ability to understand consumers in other places as completely different from U.S. consumers, with different needs, will allow us to differentiate products, target effectively, and realize continued (and increased) success around the world.
Random Photo of the Day: