The USDA’s Foreign Agricultural Service believes ample opportunities exist for US agricultural exports to South Korea.
Relayed in a release, the FAS said, US agricultural product exports hit a record $9.5 billion in 2022, up 2% from 2021. South Korea is the sixth largest export market for the US, thanks in part to a successful free trade agreement between the two countries and a robust demand for high-quality US food products.
US MEATS RANK HIGH IN SOUTH KOREA EXPORTS
Top US agricultural exports include beef and beef products ($2.7 billion), pork & pork products ($610 million), dairy products ($569 million) and corn ($508 million), the release said. In addition, other US foods have made significant inroads into the South Korean market, including eggs and egg products, food preparations, coffee and related products, distilled spirits, pet food, condiments and sauces, certain fruits and vegetables, and certain vegetable oils.
While US food exports to South Korea were at record levels for the past two years, expectations for final 2023 totals were more tempered. The FAS said, South Korea’s economic growth was a modest 1.4% in 2023 because of its declining exports to the world, weakened technology sector like semiconductors, electronic devices and computers, high inflation rates and reduced consumer spending.
Furthermore, unfavorable US dollar/Korean won exchange rates have led some South Korean traders to search for more affordable alternative suppliers to meet import demand, the FAS said.
Nevertheless, the outlook for South Korea is more bullish for 2024 and beyond with hopes that an economic recovery in China will provide a boost to South Korean exports, and private consumption and investment will rebound, albeit gradually, the FAS said.
BEEF A TOP IMPORT
Supported by the KORUS agreement, South Korea was the top destination for US beef products in 2022, the FAS said. According to a survey conducted by Gallup in December 2022, South Korea’s perception of US beef had improved significantly during the past decade.
While there is still a significant and influential domestic beef cattle industry, South Korea relies on beef imports, which accounted for 64% of consumption in 2022, to meet its burgeoning demand, the FAS said. South Korean beef imports from all sources reached $4.5 billion in 2022.
The US is the largest supplier of beef products and holds a 58% market share. Australia (33%), New Zealand (4%) and Canada (4%) are other top contributors.
In 2022, tariff rates ranged from zero to 10.6% across different beef products, the FAS said. However, tariff rates and safeguard duties were expected to phase out for all beef products in 2026 and 2027.
South Korean beef imports were forecast relatively flat by volume in 2024.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $165.82 per cwt to $173.08, compared with last week’s range of $172.57 to $180.00 per cwt. FOB dressed steers, and heifers went for $268.50 per cwt to $275.17, compared with $274.30 to $279.24.
The USDA choice cutout Thursday was up $0.68 per cwt at $292.32 while select was off $0.95 at $258.26. The choice/select spread widened to $34.06 from $32.43 with 140 loads of fabricated product and 30 loads of trimmings and grinds sold into the spot market.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.25 to $1.38 a bushel over the Mar corn contract, which settled at $4.79 1/4 a bushel, down $0.00 1/4.
No delivery intentions were posted for Dec live cattle Thursday.
The CME Feeder Cattle Index for the seven days ended Wednesday was $217.84 per cwt, up $2.51. This compares with Thursday’s Jan contract settlement of $219.35, up $1.97.