Even though the U.S. red meat industry achieved record exports in 2021, that export market is currently being held back by continuing logistics issues.
At the USDA’s Agricultural Outlook Forum last Friday, U.S. Meat Export Federation (USMEF) Economist Erin Borror said that the U.S. consumers’ massive shift from spending on services to spending on goods caused shipping bottlenecks to appear.
?Asian exporters are paying premium shipping rates, sometimes 10 times what the rate is for going from the States back to Asia, and this shipping rate disparity incentivizes sending back those empty containers- so turning them as quick as you can,? Borror said. ?And this results in shipment delays, so as exports get bumped for empty containers on ships, cargo is delayed weeks or even months waiting for shipment space. I know I was talking to one exporter and they had products sitting on rail cars outside of the West Coast ports, waiting to go to China, luckily frozen product, but waiting for 21 days, 30 days, for ship space.?
Borror noted that the shipping inconsistency has a particular impact on chilled meat exports.
?Chilled is a big part of U.S. red meat export portfolio and our competitive advantage,? Borror said. ?So, we had $3.73 billion in waterborne chilled beef exports last year, or an increase of about a billion dollars over 2020. And the important note is the premium on a per pound basis over frozen. So, we want to be in this chilled business. When we sell choice and prime product into retail it needs to be chilled. This is how these markets have been developed. We want them to be day in and day out customers and we want to capture these big premiums of, for example $2.54 A pound in Taiwan. And when there’s uncertainty added in and it’s no longer a just-in-time business, it becomes really problematic.?
For more information, visit usmef.org.
