New Competition from Canadian Beef


DTN AgDayta

Richard Smith

DTN Tokyo Correspondent

U.S. beef exporters, after having worked hard to increase acceptance of U.S. beef in South Korea, may face a new challenge if Canada is successful in efforts begun earlier this summer to return to the South Korean market.

Whether U.S. beef exporters would be significantly hurt by Canadian beef’s return may depend on how Korean consumers take to the latter meat. Some people in the trade fear the same consumer backlash, due to BSE concerns, that U.S. beef suffered two years ago may hit Canadian beef this time.

Hyo-Seok Kim, meat team senior associate for 115-store Homeplus, one of the big three South Korean discount retail chains, said depending on consumption, his company may have to reduce purchases of U.S. beef anywhere from 10 to 50 percent.

Bo-Hee Lue, the Korea Meat Import Federation secretary-general, said upon import resumption, Canadian beef volumes will be small. “I doubt it will have much impact,” on U.S. beef imports.

The livestock team assistant manager/merchandiser for the 84-store discount retail chain Lotte Mart fears anti-BSE protests will erupt again when the South Korean government allows Canadian beef back in.

Ji-Young Yoon said when three-month protests against U.S. beef started in late April 2008 after the government agreed to allow import resumption of the meat, only a few people were demonstrating, but the movement soon grew to enormous proportions. “I think there is a danger it will be the same for Canadian beef,” Yoon said.

The chief buyer for imported meat of 127-outlet E-Mart said he knows the quality of Canadian beef is really good, but the image of BSE is severe in South Korea. “I know Canadians feel very proud of their beef, but in South Korea (the BSE image) is very negative. I don’t think it’s going to be easy,” Jun-Hee Lee said.

South Korea, along with other nations, halted imports of Canadian beef in May 2003 beef after a case of BSE, bovine spongiform encephalopathy, was detected; similar bans were placed on U.S. beef after a BSE case was found in the U.S. in December 2003.

Canada Beef Export Federation South Korea director Hwan-Kyu Kim said in his opinion, whether there will be an anti-Canadian beef movement depends on how persuasive the Canada-South Korea beef deal will be to South Korean people. However, he said the industry will need to overcome another hurdle.

After the 2003 bans on beef from the U.S. and Canada because of BSE, consumers got used to the taste of less-marbled Australian beef. “They have gotten too used to it. They are saying that U.S. and Canadian beef is a little bit oily and smelly,” Lee said.

Homeplus’ Kim said his chain is committed to selling Canadian beef, and when the market opens, will try to sell the meat faster than its competitors. Will consumers accept it? “We can do it,” he said.

Market timing would be good right now for Canadian beef to come back, as South Korea’s beef imports rose significantly this year, both overall and from individual supplying countries.

Statistics from the Korea International Trade Association (KITA) show from January through June, overall imports went up 21 percent compared to the same period last year, from 102,940 to 124,669 tonnes. Imports of U.S. beef grew by 57 percent from 23,970 to 37,591 tonnes, with an increase in the import market share from 23.3 percent to 30.2 percent.

Imports of Australian beef increased 8 percent from 60,289 to 65,002 (metric) tonnes, although losing market share from 58.6 to 52.1 percent, while imports from New Zealand went up 17 percent from 17,560 to 20,556 tonnes, gaining market share from 16.5 to 17.1 percent. Even Mexico’s small trade went up 36 percent from 1,121 to 1,520 tonnes, with market share rising from 1.1 to 1.2 percent.

Meat and Livestock Australia’s South Korea director dismissed Aussie beef’s market share loss. “We’re growing, America is growing, everybody’s growing, the big pie is growing,” Jim Lim said.

In 2002, the year before BSE was found in the U.S. and Canada, the latter ranked fourth among beef-exporting countries in South Korea, with a 4 percent share of almost 13,974 tons on total imports of nearly 315,830 tons, KITA figures show. That year, the U.S. held a 64 percent share of more than 201,128 tons.

Source: DNT AgDayta

Posted by Kaci Switzer

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