For Immediate Release                                                                      
Nov. 8, 2004

Contact:  Burt Rutherford at TCFA                
Lynn Heinze at USMEF  (303) 623-6328

PICTURE FOR U.S. BEEF EXPORTS STILL UNCLEAR, USMEF CHAIRMAN SAYS

            Trying to predict the future for U.S. beef exports is at best a murky proposition, said Alan Smith, newly-elected chairman of the U.S. Meat Export Federation (USMEF).  But the former TCFA director, speaking to fellow cattle feeders at the 2004 Annual Convention of the Texas Cattle Feeders Association (TCFA) in San Antonio , said cattlemen can be sure of one thing-the U.S. beef industry is working very hard to regain markets.

            That effort began immediately after the December 2003 BSE announcement.  "In early January, USMEF put into place a crisis management plan to respond to inquiries, develop strategies to reassure a number of audiences ranging from consumers to government decision-makers, support efforts to reopen markets and, once these things were accomplished, to begin the process of recovering market share," Smith said.

            In addition, the beef industry worked with an international PR firm to roll out the message in Korea , China , Hong Kong , Mexico and Russia that U.S. beef is safe and wholesome.  "And, USMEF and NCBA have worked with an international group of BSE experts to further develop and refine our messages and communications strategies." 

            These and many other efforts continue as the beef industry works to bolster consumer confidence worldwide in U.S. beef.  And markets are beginning to come back.  

Since the December 2003 announcement of BSE in the U.S. and the loss of major export markets, the U.S. has been able to partially regain exports to Mexico and Canada .  "Interestingly, a market most of us have written off for years-the European Union-is now our second-largest export destination.  Several countries in the ASEAN have reopened, as have most Caribbean islands." Smith said.

The much-heralded framework for reopening the Japan market is a significant development, but there are hurdles remaining for the U.S. beef industry, he said.  "How soon will product begin to ship to Japan?  Depends on who you ask." 

During USMEF's annual meeting in Albuquerque , cattlemen heard two different interpretations of the "agreement" between the two countries, he said.  "According to USDA, law changes and systems should be in place to allow the shipment of beef to Japan by the end of the year.  However, according to a Japanese representative from the Ministry of Agriculture, it will take longer and he failed to speculate on how long it might take, only that Japan would not be in a position to accept exports before the end of the year." 

In other words, he said, Japan sees the market opening up "later than sooner" as they interpret progress needed for U.S. beef exports to resume. 

Smith expects Taiwan to open soon, which will be a positive step.  " Korea , our third largest export market, has politely told negotiators to come back with a proposal for allowing more of its rice into the United States before it talks about beef." 

In short, Smith said, there is a lot of work still to do.

USMEF is accepting the challenge, working both in markets where the U.S. has limited access, and in those where access is yet to be granted. 

Why work so hard to reopen international markets?  Smith said a quick look at history gives an answer.  "Beef exports in 2003 amounted to nearly 1.3 million metric tons.  That's 2.8 billion pounds for those of us still working with the U.S. system, which is 11% to 13% of our production.  The value of these exports to the industry was more than $3.8 billion in 2003."

Cattle-FAX estimates that cattle feeders could have done far better this year had exports continued uninterrupted, he said.  "Cattle-FAX estimates the economic loss to feeders to be $9.50 to $10 per hundred as the result of beef export losses; another $3 to $4 because we aren't selling variety meats internationally; and another 50¢ to $1 because of interruptions in other bovine exports.  Add it up and the market closing hit us in the pocketbook to the tune of $13 to $15 per hundred, or $165 to $190 per head.  In other words, a good year could have been a really great year." 

Looking to the future, Smith said it's difficult to make any accurate predictions.   "As incredibly small as the risk is of having infected animals in the human food supply or of contracting the human disease from the beef we eat, BSE remains the single most challenging trade issue confronting this country, and other beef exporting countries, for that matter," he told cattle feeders. 

However, there are positive signals that ultimately, trade will begin to return to normal.  But it won't be easy.

"The next year or two will be especially challenging to USMEF and those of us who believe in the value of exporting beef," he said.  "We will be asked to reintroduce a product with a great track record for taste and safety whose reputation has been tainted in the minds of many international consumers.  We will have to explain the science, we will have to build the case for product safety and we will have to resurrect consumer confidence in our product."  That, he said, will take time and money.  Fortunately, the infrastructure is in place through 13 USMEF offices around the world. 

"The struggle won't be easy and exports won't just bounce back to $3 or $4 billion dollars," Smith said.  "You can be assured, however, that USMEF will do its part to put U.S. beef back on the world's table."