U.S. Beef Exports May Increase 7% on Demand From Japan, Korea

By Aya Takada

March 5 (Bloomberg) -- Beef shipments from the U.S., the world’s largest producer, may increase 7 percent this year as demand from Japan and South Korea grows, an exporters’ group said.

U.S. beef exports will probably climb to 1 million metric tons as shipments to the two Asian countries may reach 200,000 tons, Philip Seng, president and chief executive officer of the U.S. Meat Export Federation, said in an interview in Tokyo.

Rising exports will assist U.S. producers as domestic consumption is weakening amid the nation’s worst recession in a quarter century. Increasing imports may hurt sales of locally produced beef and erode feed grain demand in Japan and South Korea, the world’s largest and third-biggest corn importers. A ban on imports of the meat by Korea was lifted last June.

“We have an added access to the Korean market, and also we will do better in the Japanese market,” Seng said.

Japan and South Korea will probably be the equal third- biggest export markets for U.S. beef this year, buying 100,000 tons each, Seng said. U.S. beef demand in Mexico and Canada, the largest and second-biggest foreign buyers, is unlikely to increase because of a stronger dollar, he added.

U.S. beef sales to Japan are growing as consumers seek a cheaper alternative to domestic beef amid an economic slump, Seng said. A weak dollar against the yen and falling feed grain prices made American beef more price-competitive in the market.

Grain Costs

“Grains constitute about 60 percent of total costs for producers,” Seng said. The yen jumped 23 percent against the dollar in 2008.

South Korean imports of U.S. beef exceeded 57,000 tons last year after a ban on the meat was lifted. South Korea barred imports in 2003 when the U.S. discovered its first case of mad cow disease. The ban was lifted in 2006 for boneless cuts from young cows and later reinstated after bone fragments were found in some meat.

World beef demand is expected to decline slightly this year as a slump in global economies and rising unemployment make consumers cut spending, Seng said. Beef producers worldwide will probably reduce output to 58.9 million tons from 59.2 million tons in 2008, in line with weakening demand, he added.

To contact the reporter on this story: Aya Takada in Tokyo atakada2@bloomberg.net