Beef Jerky

Japan & South Korea Equally Hungry for U.S. Beef

Iowa Beef Industry Council | January 2, 2019

Contact: 

Tamara Heim, Director, IBIC, tamara@heimlivestock.com, 712-310-3203;
Dan Hanrahan, Director, IBIC, danhanra@aol.com, 515-681-4619

AMES, IA – The Japanese market for U.S. beef continues as the number one export market for our products.  South Korea is edging forward to compete for the same product currently the number two export market.  The Iowa Beef Industry Council (IBIC) funded in part by the Iowa State Beef Checkoff Program recently joined other commodity partners on a meat trade mission to Japan and South Korea.  During the mission, led by the Iowa Economic Development Authority and coordinated with U.S. Meat Export Federation (USMEF), a contractor to the beef checkoff, there were meetings with top import companies interested in U.S. beef.  Tamara Heim, beef farmer and IBIC elected director from Logan, and Dan Hanrahan, beef farmer and IBIC Director from Cumming, represented the interests of Iowa’s beef farmers.

Dan Hanrahan from Cumming, and Tamara Heim from Logan, represented Iowa beef farmers at as agricultural leaders continued building relationships in Japan & South Korea on recent Iowa meat trade mission.  They are pictured here showcasing U.S. beef products available in a retail outlet.

Japan 

Tokyo is the largest metropolitan in Japan with over 10 million people.  To put that into perspective, the foot print of Des Moines would fit 10 times into Tokyo.  In terms of population you would have to stack those 10 cities up 3 times to equal the same population density.  This is a huge market and it is growing despite a declining population.  For example, 25% of the population is of the 60-70-year age group and they have increased their meat consumption by 45% since 2006.   Hanrahan adds of his experience, “It was welcoming to hear the Japanese government promote the health benefits of beef to their aging population.” 

Second, Japan has a high demand for beef.  As the quantity of Prime grade beef production continues to increase in the U.S., we need an outlet for this high-quality beef and Japan fits with our products.  The Japanese consumer is demanding a leaner beef as compared to traditional domestic Wagyu and the U.S. Prime grade fits this perfectly.  In addition, Japan demands variety meats such as intestine and tongue.  This matters in the example that beef tongue sells for more than $6.00/lb. in Japan as compared to $1/lb. in the US; this is a huge export premium and makes good business sense. 

And last but certainly not least, convenience is key in Japan.  From Bento style lunch boxes to standing steak houses the Japanese consumer wants convenience.  Chilled beef imports that feed these convenience markets are up 30% according to the USMEF.  Caution that this market may face some difficulty in the future due to the tariff situation.  The current tariff on U.S. Beef is 38.5% and competitors (Australia, New Zealand, EU and Canada) will see a reduction in their tariff beginning December 30th.  This makes U.S. beef more expensive for Japan to import.  Market access is critical to the export conversation. 

Korea 

Korea is currently in a “Meat Boom”!  This is an amazing trend considering in 2006 U.S. Beef exports to Korea were zero.  Consumer confidence is currently trending at 52.2% but lingering fear of BSE is still the limiting factor.  Trends contributing to the meat boom are average annual income growth of $10,000 since 2006, the Korean diet becoming more westernized and meat affordability are other factors.  Korea imports almost 70% of its beef and of that 60% is U.S. Beef. 

Korea is a great market for products that are not highly consumed in the U.S. such as Ribs, Chuck Roll (neck) and Shoulder Clod.  Packaging meat in Korea has a wide range from large primal cuts to individual servings.  Heim comments, “I had the opportunity to visit Costco in Korea.  While it looked much like a Midwestern Costco, you could physically see the demand for beef in the amount of people waiting at the meat coolers to pick their cut.  More specifically there were more coolers and consumers hovering around the U.S. Beef than our competitors!” 

On one final note, the tariff situation in Korea is beneficial to U.S. beef.  Tariffs on U.S. beef are currently at 21.3% and scheduled to go to 0% in 2026.  Market access for processed beef will be a great area for growth in this export market that currently is not allowable for export in this country. 

Heim recaps the mission, “overall Asia is a huge market for U.S. Beef and their desire for continued relationships with U.S. Beef producers resonates and was evident in the meetings.” 

IBIC has a mission to expand beef’s position in the domestic and global marketplace. According to the U.S. Meat Export Federation (USMEF), a contractor to the beef checkoff, data, the value of the international markets for beef add $318.66 value per head to a fed steer year to date. 

“In meeting with Japan's three largest meat processors, it was amazing how many times I heard the names of rural Iowa communities.  It was something to be able to talk about Iowa beef and agriculture halfway around the world at a depth some of us might not be able to talk with our own neighbors,” comments Hanrahan of the recent mission climate. 

The mission was coordinated by Iowa Economic Development Authority with representatives from the Iowa Beef Industry Council, Iowa Pork Producers Association, Iowa Corn Promotion Board and several other private business professionals. Checkoff investments with U.S. Meat Export Federation (USMEF) assisted with many of the in country meetings while promoting U.S. beef in these countries.  The mission was partially funded by the Iowa Beef Industry Council through the Iowa State Beef Checkoff Program. 

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About the Iowa Beef Industry Council:  The Iowa Beef Industry Council is funded by the $1.50-per-head beef checkoff.  Checkoff dollars are invested in beef promotion, consumer information, research, industry information and foreign market development, all with the purpose of strengthening beef demand.  For more information, visit www.iabeef.org.