Agriculture Secretary Ann Veneman recently said U.S. beef exports would fall 83 percent this year due to concerns about mad cow disease. Many countries continue to ban U.S. beef, as they have since the first mad cow case in the United States was found last December.
So, are those countries still eating beef? And, what exactly are they doing to replace the U.S. supply?
U.S. beef exports last year totaled $3.9 billion, but just four countries accounted for about $3 billion of that: Japan, Mexico, South Korea and Canada. Japan and South Korea have maintained their bans. Canada and Mexico have partially lifted theirs.
Japan: Previously the biggest importer of U.S. beef, Japan bought almost $1.2 billion last year, nearly a third of the U.S. export market, which explains why U.S. officials have been so determined to restart trade. After all, much of that meat is high-end steaks.
Many Japanese have been eating less beef, often switching it out with pork, noted Tadashi Sato, agricultural attaché at the Japanese Embassy in Washington. In February, Japan's total beef imports were down over 20 percent. And the U.S. Department of Agriculture forecasts Japan's overall imports this year will fall 36 percent.
Some of the premium meat -- and specialties like tongue, which can command $20 or more per pound -- has been replaced by Australia and New Zealand, neither of which has ever had a case of mad cow. (Mad cow disease is thought to be transferred through animal protein found in cattle feed, and New Zealand's beef is almost entirely grass-fed.) Australia is accounting for nearly 90 percent of Japan's imports, while New Zealand's exports to Japan more than doubled in January. Of course, those two nations' exports to the United States and Canada have shrunk.
Mexico: U.S. beef exports to Mexico, worth about $777 million last year, improved somewhat after Mexican officials eased their ban on U.S. beef in March. Mexicans now have access to boneless beef from cattle under 30 months, as well as some organs and specialty parts like tongues. But after visiting U.S. plants, Mexican officials said they won't lift the ban on certain items, like bone-in beef.
For this year, Mexico's imports are expected to drop 32 percent, and the country is currently importing about 40 to 50 percent of the beef it shipped before the ban. However, it has increased its domestic production, even though its herd has shrunk over the past decade. Canada may also compete for some of the remaining business.
Korea: South Koreans, who bought $685 million of U.S. beef last year, appear to simply not be eating beef, since U.S. meat made up more than half of the country's beef imports -- over 292,000 tons last year. Imports in March were down over 50 percent from just five months earlier, and the USDA believes imports will be down 55 percent this year. Neither Australia nor New Zealand will likely be able to make up the shortfall from losing the U.S. supply. Total consumption is forecast to be down, too.
It is expected the country will consume at least 25 percent less beef this year. While Korea does have a small domestic beef industry, its homegrown meat is far more expensive than imports -- four times or more the price -- and mostly sold to well-heeled consumers looking for premium meat.
Canada: The U.S. has been locked in a tit-for-tat with its neighbor to the north over beef trade. Canada found its first mad cow case last May, which prompted a U.S. ban on Canadian beef that was partially -- but not completely -- lifted last year. The Canadians, who bought $284 million in U.S. beef last year, banned American imports after the first U.S. case was found last December.
At this point, both countries are accepting some beef from younger cows, with industry officials pushing for a full rollback, but a recent USDA decision to further ease the ban was halted in court by a group of independent cattlemen.
Of course, the finding of mad cow on an Alberta farm last year pretty well devastated beef exports, so the country has a big surplus of cattle it can slaughter for domestic consumption. Canadians are expected to eat about as much beef as they did last year, but they will export more and import less.