Limited credit availability, volatile currency exchange rates and global economic uncertainty will create an uphill climb for U.S. beef and pork exports in many foreign markets for the remainder of the year, according to the U.S. Meat Export Federation.

"The financial crisis that has plagued us in the past six weeks has obviously had a major impact," said USMEF President and CEO Philip Seng in a news release.

Japan

Japan is one of the few key trading partners whose economy has fared well in recent weeks, according to Greg Hanes, USMEF Japan director.

"There will be some slowdown there, but not as much as we expect to see in some of the other countries," Hanes said. "Japan is an extremely steady, consistent customer."

Hanes noted that seafood consumption is trending downward in Japan, creating opportunities for red meat. Unlike other currencies, the yen has strengthened against the dollar recently, enhancing Japan's appetite for imported products. Through August, U.S. pork exports to Japan increased 29 percent in value over the same period last year, while beef exports increased 64 percent.

According to Hanes, Japan's gate-price system for imported pork hinders imports by moderating the current purchasing power of the yen. But that obstacle is not likely to go away until further progress in made in the Doha round of the World Trade Organization negotiations.

U.S. beef exports are slowed by Japan's policy that limits imports to U.S. beef from cattle 20 months of age or younger. Hanes said he is cautiously optimistic that this age limit could be raised to 30 months at some point next year, but this remains a very sensitive and volatile issue in Japan.

South Korea

South Korea has had a sluggish economy and the Korean won has performed poorly in 2008 versus the U.S. dollar. Still, Korea increased U.S. pork imports through August by 47 percent in volume and 28 percent in value over last year. U.S. beef has re-entered Korea, finding some success among small retail outlets, but Jihae Yang, USMEF director in South Korea, said large retailers are still reluctant to sell U.S. beef.

Russia

Russia has also been slammed by the devaluation of its currency as well as a severe drop in oil revenues and other economic issues.

"Russia is oversupplied and overstocked," said John Brook, USMEF director for Europe, Russia and the Middle East. "There is a period of correction going on, which could last several months." Still, Brook pointed to strong imports of U.S. beef and pork in the first eight months of 2008 as hope for the future.

China

The recent slower pace of U.S. pork exports to China appears more related to shifts in China's policy priorities than to current economic conditions.

"China has started to rebuild its domestic herd, and the numbers suggest they are having success and it is paying off," said Joel Haggard, USMEF senior vice president for the Asia Pacific region. "So we've seen some slowing of pork moving to China, even though we'll still achieve record totals for the year."

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