You may recall the recent free trade agreement (FTA) between the United States and South Korea that was announced on December 3, 2010.  South Korea has long been a major export market for U.S. meat and with much growth expected into the future.  Beef exports to South Korea have increased over 55,000 metric tons and over $55 million from 2006-2009.  In 2010 alone, exports increased 136% in volume.  Pork exports are expected to exceed $150 million in 2010.  South Korea is currently the 5th largest export market for pork.  The American Meat Institute (AMI) estimates that once the FTA is fully implemented, beef and pork exports to South Korea could increase by the $2 million and result in 26,700 new U.S. jobs.  This added growth in U.S. beef exports has all been due to successful trade talks of the U.S. government and supportive senators such as Sen. Baucus (D-MT).  Due to their success the South Korean market, which had been closed to the US from 2003-2007, was reopened.

At the same time this FTA was announced and being ratified, South Korea had begun to deal with the worst outbreak of Foot and Mouth Disease (FMD) in their nation’s history.  The first cases were confirmed on November 28, 2010 and have continued to get worse.  To date, the country has culled over one million animals, mainly pigs and cattle, in attempts to contain the outbreaks of FMD.  That is about 8% of the country’s total population of pigs and cattle.

With all livestock markets closed and the majority of the country’s livestock population under quarantine the demand for imported meat products is bound to increase.  The outbreak caused the prices of both beef and pork to rise.  They are expected to stay on the rise through the high-demand Chinese New Year holidays.

Though the FMD epidemic that has hit South Korea is certainly a tragedy, I believe that this presents an excellent opportunity for the United States to increase beef and other meat exports to South Korea.  This will not only bring more revenue into the US but also create more jobs.  USDA’s Economic Research Service estimates that for every $1 billion in beef exports, over 12,700 jobs will be created.  As the Korean consumers’ confidence in their own beef supply weakens the demand for a safer beef supply will rise. This may lead to new talks between the US and South Korea to allow access for over thirty months beef which currently is still not being accepted by the Korean government.  As we head into 2011, changes in the US-South Korea FTA may be on the horizon and from the way things are looking they can only be good changes for the United States beef industry.