KANSAS CITY, Mo. (DTN) -- Speaking to meat exporters and livestock producers last week, the administrator for USDA's Foreign Agricultural Service stressed the need for U.S. agriculture to start creating new markets in regions such as Africa.
USDA earlier in the week had announced $300 million for the Regional Agricultural Promotion Program (RAPP). That included $21 million for the U.S. Meat Export Federation (USMEF) in addition to $16 million that the meat-export group typically receives from other USDA trade promotion programs.
Meeting last week in Kansas City, Missouri, Dan Halstrom, president and CEO for USMEF, called said RAPP is a "shot in the arm" that is designed for developing regions of the world.
"The timing couldn't be better, especially in some of these developing regions -- Africa, Central America, South America, and the southeastern Asia countries," Halstrom said.
DIVERSIFY FROM MAJOR MARKETS
One of the key drivers for RAPP is to help major commodities diversify away from their major markets. Roughly 60% of U.S. agricultural exports go to China, Canada, Mexico and Europe.
For the first quarter of 2024, pork exports were $2.1 billion and beef exports are $2.48 billion. Both are about 6% higher than a year ago.
Looking at beef, Halstrom noted tonnage in the first quarter of the year is down, but the dollar value of the sales is up. That says, "The customer, globally, is willing to pay for U.S. beef," he said.
Halstrom pointed to challenges red-meat exports could face in major markets. He pointed to the Biden administration's new tariffs on Chinese technology. "There's a lot of speculation on what that means," Halstrom said, adding "We're hopeful things remain calm."
Japan is also a major market for both pork and beef, but Japan's currency, the Yen, is down 20% against the U.S. dollar in the past year. Beef already faces a 21% or larger duty there, depending on the cuts. So far this year, the value of sales for pork and beef has each dropped about 1%.
Daniel Whitley, USDA's administrator for the Foreign Agricultural Service, noted how exports to China crashed during trade disputes in 2018 and 2019.
"We learned a very valuable less that overreliance on single markets are not healthy," Whitley said.
POTENTIAL OF AFRICAN MARKET
Turning attention to Africa, Whitley talked about 2050 being the point when 10 billion people are expected to live on the planet. Africa will have 2.5 billion people, or about 25% of the global population.
"It is critically important that we expand our presence, that we expand our vision and that we expand our relationship on the continent."
A lot of African countries have a young population -- 70% of people on the continent are under age 30 -- and more people moving into the middle class.
"That's why it's important that we understand what's at stake and what's at risk in being to do that and the RAPP will allow us to do that in a ... mighty way," he said.
IMPORTANCE OF BEING IN DIFFERENT COUNTRIES
Explaining the importance of being on the ground in different countries, Whitley said U.S. food products are often derided largely because the country is a leader in global exports, as well as science, technology and innovation around agriculture. "So, who do you think is at the greatest risk of misinformation being distributed? American agriculture."
Whitley continued, "So, it is critical that we give producers the tools they need to compete and be successful in these markets, because in some of our customers, some of our consumers may be getting mixed messages about the quality of our products, the safety of our products. That's why I think it is very important that we have these tools, and that we partner with all of you."
CHINA, OTHER COUNTRIES' INFLUENCE ON KENYA
Pointing to Kenya, Whitley said there is a large Chinese presence in the country with investments being made there. He mentioned a golf course in Nairobi that was filled with Chinese visitors. India, Europe, Brazil and Russia also are trying to increase their influence there as well.
"It is long overdue for us to make our presence known in Africa and take advantage of the growing opportunities we see there," Whitley said.
Just one day after Whitley touted more attention on sales to African countries such as Kenya, President Joe Biden hosted Kenyan President William Ruto for a celebrity-filled White House dinner. Biden and Ruto released a joint statement on a range of partnerships, which included encouraging more trade and called for concluding a trade deal by the end of the year.
FOOD SECURITY CHALLENGES
Whitley highlighted some of the food security challenges across Africa and the high stakes for food security. He said feeding 10 billion people by 2050 will demand an embrace of "science, technology and innovation, including seed techniques and livestock genetics.
He also noted "there's a lot of naysayers" who criticize animal protein, but consumers make choices, especially when they reach middle class. Whitley dismissed the idea that people will turn away from meat. "I just don't see a lot of it. I see demand increasing. I see the middle class growing across the world. And we know the first dollar people spend when they become middle class is on protein," he said.
Whitley agreed African countries right now are behind in technologies needed for beef production and growth will take time. He said come countries are increasing investments in areas such as cold storage. "It's still going to take a lot of investment, and I don't want to say that there is a one-size fits all approach to Africa," he said. Whitley added, "What we see in some of those major areas like South Africa, and Kenya, and Ghana and Senegal -- they rival what we're seeing in a lot of emerging markets around the world."
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Chris Clayton can be reached at Chris.Clayton@dtn.com
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