US negotiates full access to Korea after four years

On Friday 18 April 2008, the United States (US) and Korea concluded an agreement to fully reopen Korea's market to all US beef and beef products consistent with international standards and the World Organization for Animal Health (OIE) guidelines.

Korea and the US agreed on a phased beef import expansion plan. Under the first phase, Korea will accept bone-in beef from cattle aged less than 30 months of age. It was not indicated exactly when the second phase can commence, as it is in part dependent on the US implementing an enhanced feed ban rule, but is anticipated to occur without long delay.

The second phase will allow beef from cattle aged over 30 months, according to OIE standards (which exclude a maximum of seven specified risk materials).

The revision of Korea’s import protocol for US beef is expected to be implemented in mid May, and US beef to be on Korean supermarket shelves in June, focusing on cheap, short fed forequarter cuts (short rib and chuck roll made up 88% of US exports to Korea in 2003).

US exports for the remainder of the year are forecast at between 80,000 and 100,000 tonnes swt, even allowing for trade commencing some months later than previously expected.

With Japan unlikely to ease its strict age protocol on US beef (currently under 21 months of age cattle) before late this year, the US is likely to have large quantities of the popular forequarter cuts available for Korea.

The removal of the 30 month age limit in Korea will also allow shipments to be boosted, and significantly reduce potential compliance costs and violations for US exporters.

Once US beef is available, Australian exports to Korea will decline; however, our market share is anticipated to be 20-30% higher than pre-BSE, at around 50% of the imported market (compared with 23% in 2003). The resumption of US beef is expected to boost overall consumption of beef in Korea, which declined significantly after the original ban in 2003. Overall consumption is forecast by the Korean government to increase significantly over the next 10 years, growing the market for all suppliers, including Australia.

MLA Position

MLA believes that the resumption of US beef imports will help Korea recover from the decline in beef consumption evident following the closure of the market to US beef in December 2003. Once the import of US beef resumes, MLA anticipates Australia’s market share will still be around 20 to 30% above the level Australia held prior to the 2003 BSE outbreak. The Australian beef industry has been using a platform of Australian beef “clean and safe” in all marketing activities. The industry will continue to perform a role as a partner of the Korean livestock and beef sector by providing a safe product that compliments local Korean beef rather than competes with it, and ‘tops-up’ Korea’s domestic supply shortfall (as Korea is only about 40% self-sufficient in beef production).

Consumption per capita trends - source KREI Industry Projections



Consumption of beef fell following the banning of US beef in 2003; however is forecast to recovery once the US is back in the market.

Market Share in Korea - source KOTIS



Imports have a long way to recover since the banning of US beef - Australia and NZ have been unable to fill the void.

How has the market expanded for Australia? - source DAFF and ABS



Both the volume and value of Australian beef have expanded significantly since liberalisation and since 2003 when the US was excluded from the market.

Australian Beef Utilisation 2003 vs 2007 - source ABS and DAFF



The share of Australian beef production purchased by Korea has expanded from 4% to 10%.

US exports to Korea prior to 2003 - source MAF



In 2003, 88% of US exports to Korea were made up of chuck roll and short rib.