USMEF Conference Examines Export Outlook, Production Constraints, Economic Headwinds

The USMEF Strategic Planning Conference was held in Oklahoma City, attracting farmers, ranchers, processors and exporters from throughout the nation. While U.S. red meat exports will likely set a value record approaching $20 billion this year, the industry faces an array of obstacles related to the sluggish global economy, weakening currencies of key trading partners and lingering effects of the COVID pandemic. Challenges are also mounting on the production side, especially for livestock producers impacted by drought.

Keynote speaker Randy Blach, CEO of CattleFax

Keynote speaker Randy Blach, CEO of CattleFax, detailed the larger-than-expected contraction of the cattle herd, which helped drive U.S. beef production and exports to record highs in 2022 but will be a significant constraint for U.S. exporters next year. The drought has also heightened production costs for cattle feeders.

But Blach also highlighted the remarkable efficiency and sustainability of the U.S. beef industry, which he maintains is well-positioned for success even in this challenging environment.

Blach also extolled the efficiency of America’s corn and soybean producers, noting that it is a critical factor in the global success of the U.S. meat industry.

“The U.S. is the largest high-quality meat producer on the planet,” he said. “We produce the most beef, the most broiler meat and the third-largest amount of pork in the world. Sometimes it’s easy to forget that we cannot achieve this success without the soybean meal and grain products that those of you in the corn and soybean industries produce. It’s important that we recognize what a critical ingredient you provide for all of these proteins.”

USMEF President and CEO Dan Halstrom

USMEF President and CEO Dan Halstrom gave members an update on year-to-date export results and his outlook for coming months. While challenging times lie ahead, Halstrom highlighted the importance of market diversification in keeping beef exports on a record pace through the first three quarters of 2022.

Pork exports are also regaining momentum, surpassing year-ago levels the past two months. “Global demand is strong, even record-breaking, despite rising prices,” said Halstrom, “But at what point do international consumers scale back?” He listed several mounting obstacles for U.S. exports, including global inflation, ongoing supply chain challenges and the strengthening U.S. dollar. As an example, Halstrom noted that devaluation of the Japanese yen has pushed prices for U.S. meat products 30% higher than a year ago in an extremely competitive market.

Market diversification has long been a top priority for USMEF, and Halstrom praised the U.S. industry’s commitment to developing new and emerging markets for red meat exports. He noted that the often-tense U.S.-China relationship underscores the importance of this strategy. Halstrom explained that while China is a major U.S. red meat customer, on pace to purchase $4 billion in U.S. beef and pork this year, the U.S. is not nearly as dependent on China as most other suppliers.

For pork muscle cuts, just 2.3% of U.S. production currently goes to China. Chile and Brazil ship 17% of their pork muscle cut production to China, while China accounts for 9% of Canada’s production and 6% for the European Union.

Trade barriers often make market diversification more difficult, and Halstrom asked USMEF members to remain vigilant and make their voices heard in Washington.

“Our competitors realize the value of trade and they’re not standing still,” Halstrom said. “Hopefully we can encourage more aggressive action, including getting a USTR chief ag negotiator and USDA undersecretary for trade confirmed soon.”

Mark Slupek, deputy administrator of global programs for the USDA Foreign Agricultural Service (FAS)

USMEF members also heard from Mark Slupek, deputy administrator of global programs for the USDA Foreign Agricultural Service (FAS). Slupek provided a brief history of USDA’s investment in export market development, explaining that it dates back to the Eisenhower administration.

He praised USMEF as one of FAS’s most successful cooperators, noting that USDA and USMEF have had an excellent working relationship for more than 40 years. He added that strong industry support for USMEF, from a diverse range of agricultural sectors, helps ensure consistent funding from USDA.