• DATVF.ATLPHL
    1.814
    0.044
    2.5%
  • DATVF.CHIATL
    2.034
    0.018
    0.9%
  • DATVF.DALLAX
    0.921
    0.071
    8.4%
  • DATVF.LAXDAL
    1.502
    -0.092
    -5.8%
  • DATVF.SEALAX
    0.962
    -0.053
    -5.2%
  • DATVF.PHLCHI
    1.091
    -0.038
    -3.4%
  • DATVF.LAXSEA
    2.146
    -0.004
    -0.2%
  • DATVF.VEU
    1.647
    0.009
    0.5%
  • DATVF.VNU
    1.471
    -0.010
    -0.7%
  • DATVF.VSU
    1.211
    -0.011
    -0.9%
  • DATVF.VWU
    1.554
    -0.028
    -1.8%
  • ITVI.USA
    9,689.350
    14.490
    0.1%
  • OTRI.USA
    7.650
    -0.020
    -0.3%
  • OTVI.USA
    9,678.010
    13.740
    0.1%
  • TLT.USA
    2.730
    0.000
    0%
  • WAIT.USA
    156.000
    -2.000
    -1.3%
  • DATVF.ATLPHL
    1.814
    0.044
    2.5%
  • DATVF.CHIATL
    2.034
    0.018
    0.9%
  • DATVF.DALLAX
    0.921
    0.071
    8.4%
  • DATVF.LAXDAL
    1.502
    -0.092
    -5.8%
  • DATVF.SEALAX
    0.962
    -0.053
    -5.2%
  • DATVF.PHLCHI
    1.091
    -0.038
    -3.4%
  • DATVF.LAXSEA
    2.146
    -0.004
    -0.2%
  • DATVF.VEU
    1.647
    0.009
    0.5%
  • DATVF.VNU
    1.471
    -0.010
    -0.7%
  • DATVF.VSU
    1.211
    -0.011
    -0.9%
  • DATVF.VWU
    1.554
    -0.028
    -1.8%
  • ITVI.USA
    9,689.350
    14.490
    0.1%
  • OTRI.USA
    7.650
    -0.020
    -0.3%
  • OTVI.USA
    9,678.010
    13.740
    0.1%
  • TLT.USA
    2.730
    0.000
    0%
  • WAIT.USA
    156.000
    -2.000
    -1.3%
American Shipper

Korea beef market expands but issues remain

Korea beef market expands but issues remain

Officials from the U.S. Meat Export Federation met with South Korean distributors, wholesalers, retailers and industry consultants last week to assess the market for U.S. beef after a tumultuous summer since the Asian nation reopened its doors to U.S. exports.

   Among the issues facing U.S. beef are continuing consumer anxiety over safety, as well as the dramatic drop of the Korean currency against the dollar.

   'The current marketing environment for U.S. beef continues to be a challenging one,' USMEF said in a statement. 'Although consumer anxiety over U.S. beef has noticeably abated, the market remains extremely apprehensive. By far the biggest evidence of continued market reticence is the absence of U.S. beef from the shelves of large discount retail chains.

   'Despite the availability from importers and distributors of a range of both chilled and frozen U.S. beef cuts, key large discounters have not yet announced plans to restart U.S. beef sales. Traders regard such an announcement as a watershed for jump-starting sales among not only other retail stores, but also large hotels and foodservice chains, both western and Korean. Market watchers still expect an imminent announcement, although some traders believe that the recent crisis over the contamination of a wide range of Chinese origin dairy products and dairy-based ingredients from China may delay a decision due to heightened sensitivity about imported foodstuffs.'

   But the federation insisted that U.S. beef distribution is expanding in the Korean marketplace.

   'USMEF believes that several thousand traditional Korean butcher shops that specialize in imported meats now stock some U.S. beef,' the organization said. 'As of Friday, USMEF was nearing the conclusion of its second round of U.S. beef featuring at a number of prominent butcher shops. Sales at these shops have been encouraging. In addition, the number of Korean short rib or 'kalbi' houses that sell U.S. beef is increasing, despite new rules requiring outlets to indicate the country of origin of the beef products served.'

   A problem, however, has been the velocity at which U.S. imports have come into the market, with supply far exceeding sales, leading to what USMEF called a 'growing stockpile of U.S. beef.'

   According to USDA statistics, through the first week of October, U.S. beef outstanding sales plus accumulated exports exceeded 55,000 metric tons (121.2 million pounds).

   'Although no firm numbers exist, USMEF estimates that the current pace of product arrivals and port clearance may be exceeding the sales velocity by a factor of three or more,' the federation said. 'And while sales are growing, the addition of new eligible U.S. export plants at the end of last week could further increase supplies.'

   But the supply picture could be changing due to the upheaval in world financial and currency markets. The dollar has gained substantially on a weakening won, with the Korean currency losing a third of its value against the greenback since August, when the South Korean market was reopened to U.S. beef exports.

   'The Korean won has been one of the worst-performing Asian currencies against the dollar all year,' the USMEF noted. 'On Oct. 10, the won closed at roughly the 1,300 mark, and some meat importers fear that it could sink to the 1,600 mark. Restaurant operators told USMEF in recent days that customer traffic has slowed as much as 20 percent as consumers suddenly tightened spending amid growing economic uncertainty. Although the sharp drop in the currency — especially over the last two weeks — has yet to affect most wholesale pricing of U.S. beef already in the market, sustained weakness of the currency at current levels could seriously compromise U.S. beef competitiveness.'

   One last concern for U.S. beef is that the Australian dollar has dropped 30 percent against the U.S. dollar since July 1.

   'Currently, U.S. beef short ribs, the leading U.S. beef item in the Korean market, are similar in price to its chief competitor product, 120-day Australian grain-fed short ribs,' the federation said.

   Tae-Yeol Kim, chairman of the Korea Meat Import Association, noted that U.S. beef faces challenges from the devaluation of the won. In a meeting with the USMEF, he indicated that many importers have signed contracts for U.S. products at an exchange rate of 1,050 or 1,100 won to $1, but with the exchange rate now in excess of 1,300 won per $1, the importers have seen margins evaporate. There are reports of importers who are cash pinched due to low sales and mounting inventories. ' Eric Johnson

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