Despite volatility, optimism reigns at USMEF Conference in Indianapolis
Although the U.S. red meat industry faces significant obstacles in the international marketplace, demand remains robust in many key destinations where customers crave the quality and consistency of U.S. pork, beef and lamb.
This was the prevailing message delivered by U.S. Meat Export Federation (USMEF) President and Chief Executive Officer Dan Halstrom at the USMEF Strategic Planning Conference, which opened on Nov. 12 in Indianapolis.
Overcoming trade obstacles
Halstrom noted pork exports are modestly below last year’s record pace, but the gap stems mostly from a period early this year when China’s retaliatory tariffs escalated and the U.S. industry faced uncertainty about plant eligibility.
Although export data is only available through July due to the government shutdown, pork shipments are on record pace to leading market Mexico, as well as to Central America and Colombia.
Beef exports have been hit harder by barriers in China, where U.S. beef not only faces retaliatory tariffs, but also unwarranted plant delistings and China’s failure to renew registrations for the vast majority of U.S. beef plants and cold storage facilities.
Halstrom emphasized fully reopening the world’s largest beef import market to U.S. beef will require several actions on China’s part, and the lockout could extend into next year.
“This is obviously a political card being held by China,” Halstrom said. “One thing I’m very confident in is the Office of the U.S. Trade Representative is well aware of our position, well aware of what’s involved and very well informed. I do think they’ll get it worked out eventually, I just can’t tell you when – no one can.”
While ongoing negotiations with several trading partners may lead to new opportunities for U.S. red meat, especially in Southeast Asia, Halstrom stressed protecting and defending existing free trade agreements (FTA) is an urgent priority.
He noted, over the past decade, red meat exports to FTA partner countries have expanded by more than 30 percent, and exports to these destinations now account for 76 percent of total shipments.
Invoking the Paul Harvey quote, “In times like these, it helps to recall there have always been times like these,” Halstrom reminded USMEF members the industry has endured tremendous trade setbacks in the past – citing examples such as widespread market closures due to bovine spongiform encephalopathy, plunging consumer confidence and reduced buying power in the wake of the 2008 financial crisis.
“Remember we overcame all of those obstacles,” Halstrom said. “I believe with the knowledge in this room – and with continued cooperation and collaboration – we can overcome anything.”
Addressing complexities of trade relationships
Following Halstrom’s remarks, Keynote Speaker Jan Lambregts, head of RaboResearch Global Economics and Markets, offered a broad overview of the global economic situation and how it has been impacted by various economic policies embraced by the U.S., China, the European Union and Russia.
Lambregts delivered insights into recent geopolitical developments and international trade policy through the perspective of a high-stakes poker game.
In examining “who holds the cards,” his presentation discussed the macro strategies of the world’s economic and political powers, with a particular emphasis on the complexities of the U.S.-China trade relationship.
“I’m not quite sure if you will like this news, but I don’t think there will be a comprehensive deal coming soon between China and the U.S.,” Lambregts admitted. “What the U.S. is demanding is access to Chinese markets. What China will never give is access to the Chinese market because it’s not how they’ve been winning in trade during the past 30 to 40 years.”
Lambregts said, while the U.S. is currently working to isolate China, both countries are playing for time.
China has been cut off from high-end semiconductors, which he called “the lifeline of the 21st century” and needs time to develop its own semiconductor sector. Similarly, the U.S. needs time to build its rare earths capacity, including development of extraction and processing capabilities.
“In the meantime, the U.S. is basically sending all of its allies the same message – what was previously free defense now must be paid for, because the U.S. needs to be compensated, and by the way, if you want to trade with China, there are conditions now,” said Lambregts.
Lambregts also addressed U.S. financial support for Argentina, which critics argue could harm U.S. exports, particularly of soybeans and other agricultural products.
“It was a mismanaged move, I would say,” Lambregts explained. “The Trump administration considers Argentine President Javier Milei a U.S. ally, and he wanted Milei to do well in the elections. But this deal had a little bit of a hasty feel to it, and now we see unintended consequences.”
Keep an eye out for more from the USMEF conference in future editions of the Wyoming Livestock Roundup.
USMEF collects and analyzes market intelligence, implements promotional programs and collaborates with industry stakeholders and governmental agencies to increase U.S. red meat exports. This article was originally published on Nov. 13.
