U.S. Regains Status as Top Beef Exporter to South Korea
The United States reclaimed its spot as the top beef exporter to South Korea in 2017, 14 years after a U.S. outbreak of mad cow disease led to a ban on American beef and handed market leadership to rival Australia.
U.S. beef shipments jumped 13.7 percent last year to 177,445 tonnes, accounting for nearly half of South Korea’s beef imports, customs data showed on Monday. Australian shipments eased about 4 percent to 172,804 tonnes.
The North Asian country, where beef is a mainstay of the local diet, is the world’s fourth-biggest beef importer and was the third biggest buyer of U.S. beef in 2016, worth around $1 billion, according to U.S. industry data.
U.S. imports have been regaining ground since a 2003 ban on American beef following an outbreak of mad cow was first lifted four years later, although the recovery has been dented by occasional health scares.
U.S. beef shipments to Korea for 2017 rose to over $1.1 billion, Korea’s customs data showed, and are expected to cement their top position this year.
Australian beef attracts higher tariffs and farmers have been rebuilding their herds following drought, reducing supply, analysts said.
“U.S. beef imports surpassed Australian beef imports in 2017 and the reason behind that was Australia’s drought in 2017 and a tariff gap between the U.S. and Australia,” said Kim Kyung-hoon, a senior researcher at the Korea Trade and Investment Promotion Agency.
U.S. beef will attract a 21.3 percent tariff in 2018 while the tariff for Australian beef will be 26.6 percent, according to Korean government data.
“As the tariff gap will be maintained, the ranking won’t be easily changed,” said Kim.
Under existing bilateral trade agreements, South Korea’s import duties on U.S. beef will be eliminated by 2026 and for Australian beef by 2028.
Imports to Rise
South Korea currently relies on imports for 60 percent of its beef needs, and imports have risen over the past 15 years as falling domestic cattle production has pushed up domestic prices.
Imports of U.S. beef should rise again this year on the back of expensive local beef and a rise in U.S. beef production, said Ji In-bae, a researcher at the Korea Rural Economic Institute.
Locally produced beef ribs cost 5,280 Korean won ($4.97) per 100 grams as of Jan. 12, more than double the price of American ribs, data from Korea Agro-Fisheries & Food Trade Corp showed.
South Korea’s 2018 beef imports are expected to grow about 1.8 percent, according to the U.S. Department of Agriculture (USDA).
“Taste and affordable prices have led not only consumers but retailers and restaurants to seek more U.S. beef,” said a spokeswoman from the U.S. Meat Exporting Federation in South Korea.
Demand for chilled, or fresh, beef was expected to increase steadily as American steaks were gaining popularity, she added.
In all, South Korea imported 379,415 tonnes of beef in 2017, up 3.5 percent from a year earlier, the customs data showed, with U.S. and Australian imports accounting for more than 90 percent of the market.
($1 = 1,061.3900 won)
