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Agricultural News


U.S. Animal Protein Increasingly Dependent on Diversified Export Market

Thu, 04 Nov 2021 11:57:37 CDT

U.S. Animal Protein Increasingly Dependent on Diversified Export Market  Over the last two decades, U.S. animal protein exports have nearly tripled, growing from $7.4 billion to $20.7 billion. That growth is largely the result of successful industry marketing programs and shrewd government trade negotiations. Today, exports account for 10%-30% of U.S. animal protein production, depending on industry segment.

According to a ’new report from CoBanks Knowledge Exchange trade policy remains a vital component to building consistent and reliable export markets, and the U.S. needs to be at the negotiating table as new trade developments unfold. The recent nomination of a chief agriculture negotiator with the Office of the U.S. Trade Representative is an important step in that direction.

The Trump administration’s harder line on trade, continued by the Biden administration, has led to mixed results for U.S. agriculture. Agricultural exports to China have flourished under the Phase One agreement, but the U.S. withdrawal from the Trans-Pacific Partnership (TPP) has likely resulted in lost opportunities for U.S. exporters.

“Continued diversification of markets and products is critical for a vibrant U.S. protein export trade,” said Brian Earnest lead animal protein economist with CoBank. “The successes the U.S. meat industry has enjoyed during the Phase One agreement with China are not assured in 2022 and beyond. And the lack of U.S. participation in evolving global trade partnerships in recent years has put export success at risk.”

Since 2000, the share of U.S. meat and poultry volume exported has increased from roughly 6% to over 13%. Those gains were made on the heels of the North American Free Trade Agreement (NAFTA) and other trade agreements reached by U.S. administrations dating back to President Reagan.

However, for more than a decade, free trade has become decidedly less popular in the U.S. Unfortunately for U.S. meat exporters, the rest of the world continues to make headway on trade agreements that threaten to put U.S. producers at a disadvantage in global markets.

As exports to East Asia and North America have expanded, European markets have eroded for U.S. protein exporters. Nations outside of East Asia and North America make up nearly one-third of all U.S. protein export volume. And many of those countries are directly involved in multilateral trade deals that don’t include the U.S., such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

The impact of the U.S.-Mexico-Canada Agreement (USMCA) has been minimal, as U.S. beef and pork had already enjoyed duty-free access to trade partners under NAFTA. However, revising a commitment with the U.S.’ first- and third-largest food and agricultural export markets calmed participants as policy makers sought to rebalance trade at the time. As export volume to China has eroded recently, a healthy trade relationship with Mexico is critical.

Access to diverse markets remains vital for U.S. meat exports, as well. For instance, USDA trade data shows that the U.S. exported 650 million pounds of broiler meat to 111 destinations in August. While nearly 65% went to the top three destinations (Mexico, China, and Cuba), 20 destinations claimed at least 1% of U.S.’ broiler meat exports.

While China has become a growing source of opportunity for meat exporters in recent years, it will become increasingly important to seek global opportunities for U.S. meat exports. This is especially true if CPTPP continues to gain top protein export nations and the U.S. is not a member.

Read the report, U.S. Animal Protein Needs Trade Negotiators Back at the Table


   

 

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