2017 will offer some potential opportunities for meat proteins originating in the United States. Depending on the outcome of the Trans-Pacific Partnership or a renegotiated form of that trade agreement, we could see a significant reduction in import duties levied against US meat protein among the various participating Asia-Pacific countries that sign onto the agreement. Currently, there are some rather high protective tariffs that are assessed against US meat exported to countries such as Japan.
If the new US administration were to adopt either this agreement or a similar renegotiated agreement, the proposed tariff duty reductions would allow our meat protein to be imported at a significant reduction in protective trade duties assessed, thereby allowing US protein to be more competitive in the world market. As we have seen in recent years, there has been a drop in the overall export meat tonnage exported from the US. Reductions in protective duties would have positive impacts that would ripple through various segments of the world economy, not only for the US meat packing industry, famers, and animal producers, but also for the world shipping industry.
Lifting China’s trade restrictions on US beef —a holdover ban from 2003 when the US was delisted by China because of cases of bovine spongiform encephalopathy, or mad cow disease, found in the US — is also a positive step being discussed between the US Department of Agriculture and Chinese health officials. This could open up a significant market for US beef.
Finally, US exporters will be concerned about the new mega-alliances that will emerge as a result of the realignment of ocean carriers because of the overtonnaging situation that has developed in last few years. Failure of the Hanjin shipping line also created a serious impediment to the stable movement of goods in the world markets.
What the realignments will produce and the services these carriers offer will either stabilize ocean logistics or create more uncertainty. Fewer vessel offerings that are further plagued by “slow-steaming” will have potential negative growth implications for time-sensitive cargo such as chilled beef and pork, which have very sensitive shelf lives. Added transit will limit the growth opportunities for one of the few US meat protein segments that grew in 2016 vs. 2015.