AR# 1516-FM
AUTHORIZATION REQUEST FOR FY 2015
CBB Budget Category: Foreign Marketing
Name of Contractor: National Cattlemen’s Beef Association
Name of Organizations Subcontracting: USMEF
I. OVERVIEW
A. AR Description: In support of the Beef Industry Long Range Plan, USMEF organizes its
programs in the international markets around the following strategic priorities:
 Market Access – Minimize the impact of government requirements and emerging
consumer issues on U.S. beef exports. USMEF staff around the world dedicate a
significant portion of time managing issues that limit U.S. beef exports. To maximize the
impact of market access initiatives, USMEF sets its priorities so that available resources
are dedicated to issues that are likely to have the greatest impact on exports and which
USMEF is in the strongest position to influence.
 Market Development – Introduce U.S. beef to new buyers in untapped sectors in each
market while expanding the volume and range of cuts purchased by current buyers.
USMEF addresses this priority through all of its marketing and development programs
in each of the international markets. USMEF staff identify areas with the highest
potential for growth and establish unique strategic objectives in each market.
As USMEF develops tactics to achieve its strategic objectives, it breaks each market into
four unique sectors roughly corresponding to the distribution flow of product as follows:
Trade (importers, distributors, processors), HRI (Hotel, Restaurant, Institution), Retail, and
Consumer. The more developed the market, the further down this distribution chain
USMEF’s activities will reach. To create further opportunities for U.S. beef, USMEF divides
each of these sectors into smaller segments. For example, the HRI sector may be divided
into family style eateries, BBQ chains, white tablecloth restaurants, local cuisine, and
catering. The opportunities presented in these submarkets provide new areas for growth.
The programs that USMEF conducts in support of its objectives may be similar in many
markets, though their implementation and the specific messages delivered through these
initiatives are tailored to fit specific target audiences. A brief description of the types of
activities conducted for both Market Access and Market Development is provided below:
Trade Servicing – trade servicing encompasses the ongoing activities that are conducted in
a market to build and maintain relationships, gather intelligence, connect buyers and
sellers, communicate the U.S. industry message, and assist target accounts.
Trade Shows – trade shows bring buyers and sellers together to discuss business needs,
reinforce personal relationships, become informed about trends, and demonstrate
current and new products. Trade shows often feature a U.S. or meat pavilion in which
USMEF and U.S. beef suppliers have booths for displaying product samples and
meeting buyers. Trade shows range from large-scale events, to smaller shows focused
on specific sectors or regions, as well as very targeted importer-hosted shows.
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Trade Teams – trade teams give participants (typically importers/distributors and decisionmakers from targeted foodservice and retail companies) a thorough overview of U.S.
beef production techniques and the industry so they are better informed about U.S. beef
quality attributes, the range of products available, safety and inspection procedures, and
trends in the foodservice and retail industries. In many cases, trade teams are an
important means to facilitate business relationships between buyers and sellers.
Seminars/Training – seminars are used to deliver relevant information about U.S. beef to
target audiences. As buyer education is one of the cornerstones of market development,
seminars allow USMEF to reach buyers in a very direct manner, ranging from large-scale
presentations to hands-on training and company-specific visits.
Communications – a variety of communications activities may be utilized to create a
positive image for U.S. beef among targeted buyers and to stimulate purchases. The
activities can help introduce new products, provide information about where to purchase
U.S. beef, generate goodwill, and promote the quality and safety of the product. Specific
activities may include advertising, article placements, and public relations events to keep
U.S. beef top-of-mind among the target audience.
Promotions – promotions are used in conjunction with a full range of activities to encourage
retailers and foodservice operators to become first-time/regular buyers of U.S. beef and
then to expand the range of products they include in their menus and meat cases.
Promotions also provide a means for delivering messages about the quality, taste, safety
and versatility of U.S. beef directly to targeted consumers. USMEF participates jointly
with HRI and retail partners in promotions that take many different forms, including new
menu features, in-store tastings, and events/contests designed to increase purchases.
Issue Monitoring, Analysis and Reporting – USMEF updates U.S. exporters, industry trade
associations and government agencies with information and analysis on import policies
and requirements that could restrict U.S. beef exports. Activities include conferences,
formal communications with relevant parties, and informal meetings.
Government and External Relations – USMEF communicates information about U.S. meat
safety systems, U.S. government export requirements, U.S. production practices, and
science-based assurances about the U.S. meat industry to foreign government
authorities, opinion leaders, the media, the trade, and the general public in international
markets. Activities include seminars, teams, educational materials, relationship-building,
public relations and research.
Technical Support – USMEF provides details to the trade and local authorities on U.S.
export specifications, certification procedures, safety inspection measures and quality
assurance programs. Activities include seminars, educational materials and teams.
Although USMEF activities are primarily focused on international markets, USMEF works
closely with industry partners to educate U.S. producers on the significance of export
markets. This partnership extends to CBB, FSBC, various state organizations, the media,
and USMEF members, etc. USMEF’s Communications Department in Denver develops
and distributes information on a daily basis, including international activity updates, market
analysis reports, trade issue assessments, export requirement changes, export data, trade
leads, and news releases. USMEF also distributes timely information through online
sources and social media (e.g. USMEF website, Facebook, Twitter). Additionally, USMEF
participates in and presents export market reports at industry meetings as requested.
According to the recently released report “An Economic Analysis of the Cattlemen’s Beef
Promotion and Research Board Demand-Enhancing Programs” by Dr. Harry Kaiser of
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Cornell University, every dollar invested in export promotion by CBB yielded an increase in
gross (before costs are netted out) beef export revenue of $43.39.
B. Costs for this AR:
Source of Funding
Beef Board/BPOC
Federation of SBCs (FSBCs)
USDA/MAP
Total Cost
C. Start date: 10/1/14
Total
$7,730,200
$1,760,000
$9,973,500
$19,463,700
Direct Costs
$5,584,685
$1,271,515
$9,973,500
$16,829,700
Implementation
$2,145,515
$488,485
$0
$2,634,000
Completion date: 9/30/15
II. PLANNING INFORMATION FOR THIS AR
A. Long Range Plan Core Strategies/Demand Drivers Addressed by This AR:
 Capitalize on global growth opportunities
B. Committee(s) recommendations for this AR:
The Global Growth Committee reviewed activities in this AR provided tactic scoring and
feedback.
III. PROGRAM INFORMATION FOR THIS AR
A. Long Range Plan Core Strategy 4: Capitalize on global growth opportunities
Strategy 4 Proposed Cost*: $9,490,200
Specific Tactic Information:
Tactic 4A: Market Development – ASEAN
ASEAN Background
In 2013, exports of U.S. beef plus variety meat to the ASEAN region decreased 59
percent in volume to 22,772 mt and 49 percent in value to $118 million. This decline
was driven by a steep drop in exports to Vietnam, down 89 percent in volume to 4,459
mt and 83 percent in value to $27 million. Exports to Indonesia performed well in the
latter part of the year after some relaxation in import licensing requirements, with yearend totals reaching 5,032 mt (up 206 percent) valued at $17 million (up 97 percent).
Exports to the Philippines were down 2 percent in volume to 11,389 mt, but value
increased 21 percent to $55 million.
Export forecasts for 2014 and 2015 are 26,000 mt valued at $130.1 million and 27,119
mt valued at $138.9 million, respectively.
*
Proposed Cost includes Beef Board/BPOC plus Federation.
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ASEAN Market Drivers
Foodservice Demand: Consumers in several markets in the region can now afford to
spend more on imported food as the middle class continues to grow. As more
international restaurant chains open, beef consumption is expanding to new market
segments. After witnessing how well alternative U.S. beef cuts perform in various menu
applications, many chefs have begun to utilize these items in their operations to provide
a better tasting meal for their customers while still maintaining profitability.
Retail Sector Modernization: Opportunities are growing across the region as the retail
sector transitions to modern supermarkets. More importers are setting up
cutting/processing facilities to further penetrate the retail sector with tray-pack/retailpack beef items which are preferred for easy inventory replenishment.
Convenience Store & Quick-Serve Restaurant Growth: With significant growth in
the convenience store and quick-serve restaurant segments, operators are looking to
source lower-cost cuts while also maintaining quality. In the Philippines, for example,
there are growing opportunities for alternative U.S. beef items such as short plate, cow
rib roll and beef loin tail that with proper handling and treatment can produce an
excellent product for quick preparation.
Potential Supply Challenges: The ASEAN region is facing price increases and supply
challenges as product flows to higher margin markets like Japan with its newly
expanded access for U.S. beef. This has created a need for more affordable U.S. beef
alternative items, including different grades, cuts or preparation methods. While high
prices may impact market share, there are loyal users that will still insist on maintaining
product origin consistency, though with some modification of the specific items used.
ASEAN Strategic Objectives
 Emphasize the benefits of grain-fed U.S. alternative cuts vs. grass-fed traditional cuts
from other sources.
 Introduce foodservice buyers to secondary cuts that only require simple preparation
but present a higher perceived value of the finished product.
 Work with distributors to provide merchandising assistance to help their retail
customers effectively promote U.S. beef.
 Educate processors on using U.S. beef variety meat such as hearts and livers as
standard input material.
 Explore expanded use of sirloin and round cuts, and increase the market for >30month and no-roll items.
ASEAN Tactical Response
 Conduct seminars to teach foodservice end-users about the profitability of
underutilized cuts and how to incorporate these items into their restaurant concepts.
 Target key food distributors, chefs, purchasing managers and restaurant owners to
address company-specific opportunities and challenges.
 Continue to focus on new opportunities, including expanding the marketing reach to
new HRI and retail subsectors in targeted markets.
Measurable objectives:
o 83% of targeted trade accounts understand the profit potential of and have a
favorable attitude towards U.S. beef based on information provided by USMEF.
o 80% of targeted HRI accounts regularly feature/promote U.S. beef.
o 86% of targeted retailers regularly stock U.S. beef.
Proposed cost*: $293,530 (Direct + Estimated Implementation)
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Tactic 4B: Market Access – ASEAN
USMEF will contribute to and support initiatives to eliminate trade-restrictive policies
and requirements in the ASEAN region, and keep the U.S. industry informed on critical
changes in local government regulations and emerging issues in the region.
ASEAN Noteworthy Market Access Issues include a) BSE-related restrictions on
imports of U.S. beef in Singapore, Vietnam and Thailand; b) Vietnam’s revised
acceptable residue levels for selected chemical compounds in meat; and c) other nonscience based barriers throughout the region.
Measurable Objectives:
o USMEF will contribute to and support initiatives to eliminate trade restrictive policies.
o 80% of USMEF members will report that they receive the information they need from
USMEF related to market access.
Proposed cost*: $13,170 (Direct + Estimated Implementation)
Tactic 4C: Market Development – Caribbean
Caribbean Background
In 2013, exports of U.S. beef plus beef variety meat to the Caribbean region were
15,648 mt valued at $87.7 million, down 11 percent in volume and 7 percent in value.
Jamaica was the region’s leading volume destination for U.S. beef at 4,692 mt valued at
$15 million. The Bahamas was the region’s leading value destination at 3,068 mt valued
at $19 million.
Export forecasts for 2014 and 2015 are 15,500 mt valued at $90.5 million and 15,700 mt
valued at $92.7 million, respectively.
Caribbean Market Drivers
Cost Control: As restaurateurs and retailers strive to manage increasing costs, there
is growing interest in sourcing smaller, portion controlled cuts (i.e. pre-cut, steak-ready
specifications) that reduce labor and excess trim costs.
Economic Challenges: Caribbean consumers tend to be price-sensitive due to the
region’s relatively high unemployment rates, marginal GDP growth and high import
duties on certain islands. To maintain a presence for beef in the retail case and on
restaurant menus, buyers are increasingly looking to underutilized cuts that provide
quality at an affordable price.
Transitioning Retail: Retail outlets continue the transition from frozen to chilled beef
products. However, retailers working with fresh beef are experiencing handling issues
such as shrink and inconsistent cold chain infrastructure.
New Cooking Styles: Island locals predominantly use slow cooking methods and stew
recipes for beef. The availability and increased awareness of higher quality beef
products has spurred interest in other cooking techniques such as grilling. This
emerging cooking concept has retailers looking to introduce new items, especially
chilled beef cuts suitable for the grill.
Caribbean Strategic Objectives
 Enhance buyer understanding of the U.S. beef grading system and highlight the
value/price relationship between quality grades and affordable cuts.
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 Demonstrate the value proposition of case-ready and portion controlled products (e.g.
strip, ribeye, top sirloin and flat iron) to retail and HRI accounts.
 Build and maintain a presence for U.S. beef in retail and on restaurant menus by
introducing underutilized and low-cost cuts such as bottom sirloin flap, tri-tip, brisket,
chuckeye roll, shoulder clod and knuckle.
 Support the development of a modern cold chain and educate buyers on the proper
handling of chilled beef.
 Educate retail staff on fresh U.S. beef cuts ideal for grilling.
Caribbean Tactical Response
 Introduce U.S. exporters to buyers looking for chilled and portion controlled beef cuts.
 Conduct deskside seminars with distributors and chefs to illustrate the cost benefits
of purchasing underutilized U.S. beef cuts at a higher quality grade for restaurant
menus.
 Educate chefs and wait staff on the attributes of U.S. beef and new cooking methods,
and support targeted restaurant promotional efforts.
 Conduct retail training on proper handling and storage of chilled U.S. beef, including
shrink control.
 Demonstrate grilling techniques to retail meat staff so they can market suitable U.S.
beef cuts to store customers.
 Develop educational handouts for the retail meat case that include recipe ideas to
promote the “Great on the Grill” concept.
Measurable objectives: (Target Audiences for Evaluation adjusted for 2015)
o 91% of targeted importers/distributors understand the supply/quality/value
relationships of U.S. beef based on information provided by USMEF.
o 88% of targeted HRI accounts promote new ways to use popular cuts or an
alternative cut of U.S. beef to their customers.
o 62% of targeted retailers understand how to properly handle and merchandise U.S.
beef.
Proposed cost*: $136,906 (Direct + Estimated Implementation)
Tactic 4D: Market Access – Caribbean
USMEF will contribute to and support initiatives to eliminate trade-restrictive policies
and requirements in the Caribbean region, and keep the U.S. industry informed on
critical changes in local government regulations and emerging issues in the region.
Caribbean Noteworthy Market Access Issues include a) BSE-related restrictions on
imports of U.S. beef in St. Lucia; and b) b) Jamaica’s excessively high import duties on
U.S. beef.
Measurable Objectives:
o USMEF will contribute to and support initiatives to eliminate trade restrictive policies.
o 80% of USMEF members will report that they receive the information they need from
USMEF related to market access.
Proposed cost*: $2,634 (Direct + Estimated Implementation)
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Tactic 4E: Market Development – Central America + Dominican Republic
Central America + DR Background
In 2013, exports of U.S. beef plus variety meat to the Central America + Dominican
Republic region were up 4 percent to 11,172 mt, with value up 9 percent to $75 million.
Increased exports to Panama (1,488 mt/+74%; $10.1 million/+74%), Honduras (1,247
mt/+28%; $5.1 million/+25%) and Costa Rica (771 mt/+32%; $4.4 million/+14%) helped
drive this growth. Exports to the DR, the region’s largest market, were 3,831 mt valued
at $34 million, up 3 percent in volume and 4 percent in value.
Export forecasts for 2014 and 2015 are 11,638 mt valued at $79.8 million and 12,425 mt
valued at $86.5 million, respectively.
Central America + DR Market Drivers
Growing Demand for Beef: Most countries in Central America continue to increase
beef imports, though in many markets, the U.S. is not the leading supplier. High global
beef prices and restricted supplies will challenge exports to the region, but will also
provide opportunities for imported value items that are more price-competitive with
domestic product. Education remains paramount as these are emerging markets and
most market participants are not well-versed in the attributes of U.S. beef.
Dynamic Foodservice Growth: With more U.S. beef flowing into the region,
restaurants are adding new cuts to their menus. Consumers are now developing a taste
for flavorful U.S. beef cooked “medium” and simply prepared with salt and pepper,
rather than tough domestic beef cooked medium-well and marinated. New opportunities
are developing for expanding the variety of U.S. beef products utilized and extending
the marketing reach to new HRI segments.
Favorable Access in the Region: The U.S.-Panama Free Trade Agreement,
implemented in 2012, immediately eliminated duties on Choice and Prime graded U.S.
beef as well as variety meats. Other duty reductions will begin in year 6, reaching zero
by year 15. The CAFTA-DR FTA provides duty-free access for a limited quantity (1,540
mt in 2014) of U.S. beef exports to Guatemala, an 8% out-of-quota duty, and no duty for
Choice and Prime beef cuts.
Central America + DR Strategic Objectives
 Educate buyers on the range of U.S. beef available to expand their product portfolios,
and train them on meat management and purge reduction for better yields.
 Assist leading importers and distributors in sourcing alternative U.S. beef cuts such
as inside round.
 Leverage the benefits of the U.S.-Panama FTA by identifying niche HRI and retail
segments for high grade U.S. beef as well as additional areas for variety meats.
 Work with DR foodservice to increase use of value cuts, and target new retail chains
to expand the market.
 Develop region-wide programs with large retailers.
Central America + DR Tactical Response
 Facilitate sales by directly bringing buyers together with U.S. suppliers.
 Promote value cuts in the HRI and retail sectors (e.g. top blade “California cut,” sliced
shoulder clod “Texas steak,” arm roast, and petite tender).
 Provide training on the proper handling and merchandising of unfamiliar cuts.
 Introduce buyers to low-cost alternative cuts (e.g. chuck tender, shoulder clod, and
top sirloin butt).
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 Continue to focus on new opportunities, including expanding into new sectors.
Measurable Objectives:
o 50% of targeted importers/distributors consistently source and successfully promote
U.S. beef to their downstream customers.
o 37% of targeted HRI accounts understand the quality and profit potential of U.S.
beef.
o 60% of targeted retailers consistently incorporate suggested merchandising methods
to promote the quality attributes of U.S. beef.
Proposed cost*: $315,618 (Direct + Estimated Implementation)
Tactic 4F: Market Access – Central America + Dominican Republic
USMEF will contribute to and support initiatives to eliminate and prevent traderestrictive policies and requirements in the Central America + Dominican Republic
region, and keep the U.S. industry informed of critical changes in local government
regulations and emerging issues in the region.
Central America + DR Noteworthy Market Access Issues include a) BSE-related
restrictions on U.S. beef imports in some countries in the region; b) lack of trust among
some Central American authorities regarding U.S. export documentation; c) confusion
about the rule of origin of U.S. meat due to the U.S. Country of Origin Labeling law; and
d) possible removal of an exoneration on a consumption tax on U.S. Choice and Prime
beef cuts in Honduras.
Measurable Objectives:
o USMEF will contribute to and support initiatives to eliminate trade restrictive policies.
o 80% of USMEF members will report that they receive the information they need from
USMEF related to market access.
Proposed cost*: $11,902 (Direct + Estimated Implementation)
Tactic 4G: Market Development – China/Hong Kong
China/Hong Kong Background
In 2013, Mainland China remained closed to U.S. beef, but new records were set for
U.S. beef plus variety meat exports to Hong Kong of 130,017 mt (up 100 percent)
valued at $823 million (up 142 percent). In February 2013, Hong Kong began accepting
U.S. boneless beef from cattle of all ages, and bone-in beef from cattle less than 30
months of age, and Macau followed with the same easing of requirements later in the
year.
The recent economic analysis report of CBB’s demand-enhancing programs by Dr.
Harry Kaiser notes that every dollar invested in export promotion by CBB in China/Hong
Kong yielded an increase in gross beef export revenue of $48.03.
Export forecasts for 2014 and 2015 are 147,000 mt valued at $979 million and 160,049
mt valued at $1.071 billion, respectively.
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China/Hong Kong Market Drivers
Improved Access to Hong Kong & Macau: Expanded access for U.S. beef in Hong
Kong and Macau has dramatically boosted exports, and both markets are poised to
allow access for offal and bone-in products from cattle over thirty-months-of-age. With
regard to China, partial access is expected by the end of 2014 or early 2015.
Convenience Items: Urbanization, rising incomes and the build-out of modern retail
chains are driving convenience offerings, and retailers are allocating more space to
prepared and packaged products. Convenience items such as deli meats and ready-touse frozen meat packs for hot pots and kebobs offer healthy, at-home meal alternatives
for consumers with busy lifestyles.
Increasing Preference for Fresh Beef: As consumers place more emphasis on food
safety, chilled beef products are gradually replacing traditional hot carcass cuts. Daily
visits to the market are becoming less common, thus the safety aspects of chilled beef
are now more important in promoting retail sales.
Booming Beef Demand: The continued rapid growth of China’s economy is resulting
in a growing middle class with increased spending power for higher quality items like
beef. The rise of China’s online retail segment, which yields more sales than eBay and
Amazon combined, is also helping sell more meat products. Beef imports are expected
to grow at least 10 percent annually for the next five years in order to keep up with
growing consumer demand. Since U.S. beef is still banned in China, Australia, Uruguay
and Canada are benefiting from China’s increased imports, especially in the flourishing
foodservice and retail sectors.
China/Hong Kong Strategic Objectives
 Educate the trade on the variety of bone-in and offal products that are available in
Hong Kong and Macau.
 Continue to build awareness of the quality and safety aspects of U.S. chilled and
frozen portion control products at retail, and chilled and frozen sub-primal cuts for
foodservice.
 Expand interaction with large foodservice operators such as casino restaurants and
high-end dining establishments in Macau, the world’s largest gambling destination.
 Explore new lower-cost chilled U.S. beef cuts with mass retail chains in Hong Kong.
 Focus on new product opportunities, including convenience and pre-cooked items
featuring U.S. beef.
 Provide fact-based information on the safety, quality and market availability of U.S.
beef to build confidence throughout the region (including China in anticipation of the
market reopening).
China/Hong Kong Tactical Response
 Develop recipes and merchandising ideas for new cuts for HRI operators, chefs and
retailers, and conduct tasting demonstrations and targeted promotions to encourage
purchases of chilled and frozen U.S. beef.
 Introduce value-added convenience items at retail, specifically processed products
such as deli meats, corned beef and hot dogs.
 Continue efforts to help fast food restaurants adopt alternative U.S. beef cuts from
the chuck, plate and round.
 Utilize mass media and social media to educate consumers on both high-end and
value options available from U.S. beef.
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 Develop online commerce channels to sell U.S. beef, especially in China once market
access is restored.
 Educate Chinese buyers and chefs about the quality attributes of U.S. beef in
preparation for future access.
 Continue to build relationships with government officials and key influencers, and
draw attention to the status of China’s domestic beef industry and its declining ability
to meet consumers’ growing beef demands.
Measurable Objectives: (Target Audiences for Evaluation adjusted for 2015)
o 62% of targeted importers/distributors understand the supply capabilities and quality
attributes of U.S. beef based on information provided by USMEF.
o 71% of targeted Hong Kong HRI outlets/chains regularly use U.S. beef and actively
participate in and/or contribute to USMEF promotions.
o 100% of targeted Hong Kong retailers regularly feature two U.S. loin cuts and one
underutilized cut.
Proposed cost*: $428,074 (Direct + Estimated Implementation)
Tactic 4H: Market Access – China/Hong Kong
USMEF will contribute to and support initiatives to eliminate/prevent trade-restrictive
policies and requirements in the China/Hong Kong region, and keep the U.S. industry
informed of critical changes in Chinese government regulations and emerging issues in
the region.
China/Hong Kong Noteworthy Market Access Issues include China’s ban on beef
imports from the U.S.; b) China’s zero tolerance policy on the presence of betaagonists, hormones and pathogens in red meat imports; c) potential issues with China’s
opaque quarantine clearance procedures/regulations on chilled red meat imports; and
d) new licensing requirements for processed meat exporters to China.
Measurable Objectives:
o USMEF will contribute to and support initiatives to eliminate trade restrictive policies.
o 80% of USMEF members will report that they receive the information they need from
USMEF related to market access.
Proposed cost*: $20,536 (Direct + Estimated Implementation)
Tactic 4I: Market Development – Europe
Europe Background
According to U.S. Census data, 2013 exports of U.S. beef plus variety meat to the EU
were down 6 percent in volume to 23,425 mt compared to 2012, with value up 7 percent
to $252 million. However, according to EU import data, which is considered a more
accurate measure of U.S. trade activity in this unique market, imports of U.S. beef were
up 6 percent to 17,306 mt valued at $217 million.
The recent economic analysis report of CBB’s demand-enhancing programs by Dr.
Harry Kaiser notes that every dollar invested in export promotion by CBB in Europe
yielded an increase in gross beef export revenue of $16.32.
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Export forecasts for 2014 and 2015 are 23,500 mt valued at $260 million and 23,500 mt
valued at $265.2 million, respectively.
Europe Market Drivers
Consumer Search for Premium Products: Although consumers may reduce the
frequency of purchasing premium foods, they spend more money as they seek the best
quality. Despite the decline in overall beef consumption, there is increased demand for
high-quality, high-priced beef in niche consumer segments. Even with record high prices
in 2014, demand for U.S. beef has remained robust and many users maintain there is
simply no alternative with equivalent quality. However, many U.S. ranchers are no
longer finding it as profitable to produce cattle for the EU and are instead selling their
cattle in the open market, placing significant pressure on U.S. beef supplies destined for
the EU market.
Retailers Seek Differentiation: Retailers tackle competition not only with price, but
also with new, high-quality products and original packaging. Although U.S. beef has
been sold mainly in specialty shops, in most EU countries, more supermarkets are
showing an increasing interest in having it on their shelves. Although retail distribution is
quite concentrated, there are a number of grocery chains within Europe that choose to
feature U.S. beef to elevate their image, vary their offerings, and compete with others.
Fierce Restaurant Competition: In the current economic climate, many restaurants
are using price to compete, while others are instead using techniques such as dry aging
to add value and differentiate high quality beef. However, with high U.S. beef prices and
a volatile Euro/Dollar exchange rate, U.S. beef is facing increasing pressure from
growing shipments of significantly cheaper grain-fed beef from Australia and Uruguay.
Europe Strategic Objectives
 Focus on primary markets Germany, Italy and the UK, and secondary markets
France, Spain and Sweden.
 Drive the attention of distributors and their client chefs to U.S. beef alternative cuts,
which offer value and versatility.
 Educate distributors and consumers about U.S. beef attributes and how to use
different cuts.
 Demonstrate to chefs the wide range of culinary preparations for various cuts.
 Work toward the elimination of technical and sanitary barriers, as well as expansion
of the duty-free quota, and support revocation of restrictive European trade barriers.
Europe Tactical Response
 Continue working with the trade to expand demand for a range of cuts, specifically
forequarter sets.
 Gather market intelligence to better understand the needs and the opinions of local
stakeholders.
 Establish distribution links for U.S. beef and conduct cost-effective joint promotion
activities with local distributors.
 Expand online social media activities on Facebook (“The Marbled Meat Club”),
YouTube and Twitter.
 Identify new markets, niches and trends to further build demand for high-quality U.S.
beef.
Measurable Objectives: (Target Audiences for Evaluation adjusted for 2015)
o 75% of targeted distributors consistently purchase U.S. beef year-round.
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o 25% of targeted distributors purchase muscle cuts other than traditional loin steak
cuts.
o 33% of newly targeted retailers make trial purchases of U.S. beef.
Proposed cost*: $411,730 (Direct + Estimated Implementation)
Tactic 4J: Market Access – Europe
USMEF will contribute to and support initiatives to eliminate trade-restrictive European
policies and requirements, and keep the U.S. industry informed on critical changes in
EU government regulations and emerging issues in the region.
Europe Noteworthy Market Access Issues include a) restrictions on the use of most
pathogen reduction treatments used in the U.S.; b) the ban on the use of beta-agonists
and hormones in red meat production; c) high tariffs and relatively small tariff rate
quotas; and d) the tendency to adopt restrictive measures regarding animal welfare,
cloned animals, and the environmental impact of meat production.
Measurable Objectives:
o USMEF will contribute to and support initiatives to eliminate trade restrictive policies.
o 80% of USMEF members will report that they receive the information they need from
USMEF related to market access.
Proposed cost*: $15,170 (Direct + Estimated Implementation)
Tactic 4K: Market Development – Japan
Japan Background
In 2013, U.S. beef plus variety meat exports to Japan increased 54 percent in volume to
234,615 mt and 35 percent in value to $1.389 billion, making Japan the largest volume
and value market for U.S. beef. The February 2013 opening of Japan to U.S. beef from
cattle less than 30 months of age has helped boost exports to this key market.
The recent economic analysis report of CBB’s demand-enhancing programs by Dr.
Harry Kaiser notes that every dollar invested in export promotion by CBB in Japan
yielded an increase in gross beef export revenue of $29.46.
Export forecasts for 2014 and 2015 are 248,000 mt valued at $1.546 billion and 255,000
mt valued at $1.620 billion, respectively.
Japan Market Drivers
Improved Access: Expanded U.S. beef access allows for consistent, year-round
supplies of a wider range of products including variety meat, prime grades and branded
items that were previously limited or unavailable.
Yakiniku Growth: Japan’s yakiniku industry, which is reliant on large volumes of
variety meats, declined by nearly one third after U.S. beef was banned from the market
in 2003. With improved access to U.S. beef, the industry is poised for a resurgence and
is expected to expand to over 22,000 outlets in the next 5 years.
Convenience Store (CVS) Opportunities: The CVS segment’s focus on fresh,
convenient foods is resulting in one of the fastest growing retail categories in Japan.
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With over 50,000 outlets nationwide serving 15 million customer visits per day, CVS
chains are looking to expand their offerings of ready-made meat items.
Regional Retail Chains: Over the last 10 years, regional retailers were unable to
access U.S. beef due to inconsistent supplies, resulting in a generation of buyers and
consumers unaware of U.S. beef’s attributes.
Branded & “Story” Beef: Competition among retail chains is fierce, with each vying
for differentiation in product supplies, using both domestic and imported brands to
alleviate safety concerns and meet demand for high-quality food items.
Nutrient Rich Proteins: Japanese consumers are increasingly demanding healthy and
nutritionally balanced foods, especially among the elderly. More consumers understand
the benefits and importance of foods for specific health functions (“functional foods”)
including beef’s functionality in immune and muscular health.
Online Shopping: Internet retailing is becoming more popular among both young,
single career-seekers and elderly consumers for the convenience it provides.
Social Media: Japanese consumers view social media as a reliable way to quickly
access product information. Expanding the information available online helps increase
the understanding of a food item’s quality and safety, it’s use in healthy recipes, and
where products can be purchased.
Japan Strategic Objectives
 Educate end-users and consumers on the unique quality and nutritional attributes of
U.S. beef as well as introduce bone-in items, which are new to the market.
 Reintroduce U.S. beef variety meats and other key BBQ cuts (beef tongue, skirt
meat, hanging tender, short plate) to the Yakiniku industry.
 Ensure 5-star and leading hotel restaurants understand the quality and value of U.S.
Prime grade beef compared to domestic Wagyu and other competing product.
 Increase U.S. beef usage in bento boxes as well as new menu items at CVS and
“deli” chains.
 Utilize U.S. brands and “stories” to differentiate products and establish consumer
trust and loyalty.
 Expand programs to target buyers at small and mid-sized retail chains outside the
major metropolitan areas.
Japan Tactical Response
 Conduct training for new regional target accounts, and provide promotional support
as appropriate.
 Work across sectors to introduce, feature, and develop unique U.S. brands/stories to
capture new market segments and build a positive reputation.
 Train Yakiniku Association member companies on the availability, quality, and value
of U.S. beef.
 Educate high-end restaurant chefs on the unique attributes of U.S. Prime grade beef.
 Collaborate with CVS chains and their suppliers to develop new items using a variety
of U.S. beef cuts.
 Provide cooking and merchandising information on new-to-market items (e.g. T-bone,
bone-in ribeye).
 Conduct consumer programs to provide U.S. beef nutritional information and
healthy/”functional” recipes.
 Use social media outlets and blogger sites to effectively expand the reach of the U.S.
beef message.
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 Work with retail chains that have online shopping/delivery to broaden the customer
base for U.S. beef.
Measurable Objectives: (Target Audiences for Evaluation adjusted for 2015)
o 43% of targeted importers/distributors consistently purchase 2 or more U.S. beef
alternative cuts.
o 45% of targeted HRI/retail accounts consistently feature 2 or more U.S. beef cuts.
o 66% of targeted bento/convenience stores offer menu items featuring U.S. beef.
o 22% of targeted consumers purchased U.S. beef within the past 2 weeks.
Proposed cost*: $3,258,592 (Direct + Estimated Implementation)
Tactic 4L: Market Access – Japan
USMEF will contribute to and support initiatives to eliminate trade-restrictive policies
and requirements in Japan, work to strengthen confidence in the U.S. industry as a
producer and exporter of beef, and keep the U.S. industry informed on critical changes
in Japanese government regulations and emerging issues.
Japan Noteworthy Market Access Issues include a) limits on imports to U.S. beef from
cattle under thirty months-of-age; b) very high duties on imported beef; c) consumer
concerns about the impact of production practices including GMO feed, feed additives,
antibiotics, cloning, animal welfare, sustainable production practices, environmental
issues, and safety and verification systems; and d) bilateral trade agreements and tariff
eliminations proposed in the Trans-Pacific Partnership (TPP).
Measurable Objectives:
o USMEF will contribute to and support initiatives to eliminate trade restrictive policies.
o 80% of USMEF members will report that they receive the information they need from
USMEF related to market access.
Proposed cost*: $134,288 (Direct + Estimated Implementation)
Tactic 4M: Market Development – Korea
Korea Background
In 2013, U.S. beef plus variety meat exports to South Korea were down 16 percent in
volume to 105,406 mt, though value increased 5 percent to $609 million. Despite
obstacles in 2013 with excess domestic meat in the market, this situation is normalizing
and prospects for U.S. beef exports to Korea in 2014 and beyond are very positive,
particularly with the benefits of the U.S.-Korea Free Trade Agreement (KORUS FTA)
that went into effect in 2012. The reduction of beef duties to zero over 15 years is
expected to help boost U.S. exports to Korea to more than $1 billion per year by the end
of that time period.
The recent economic analysis report of CBB’s demand-enhancing programs by Dr.
Harry Kaiser notes that every dollar invested in export promotion by CBB in Korea
yielded an increase in gross beef export revenue of $26.12.
Export forecasts for 2014 and 2015 are 111,198 mt valued at $676.3 million and
119,429 mt valued at $740.7 million, respectively.
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Korea Market Drivers
Domestic Beef Supplies: Although self-sufficiency is currently around 50%, Korea’s
domestic beef herd is gradually declining. Domestic beef self-sufficiency is expected to
decrease ten percent by 2015, expanding the need for imported beef, especially for
popular, high-quality items.
Chilled & Branded Products: Improved market access for U.S. beef in other Asian
markets has tightened the supplies of commonly purchased U.S. beef cuts (i.e. short
ribs) by Korean importers. To adjust to increased competition, Korean buyers are
showing more interest in chilled and branded beef items. Additionally, as consumers
begin to focus more on quality standards when making purchasing decisions,
foodservice and retail operators are also exploring opportunities for merchandising
chilled/branded beef products.
Foodservice Distribution Reformation: Foodservice distributors in Korea are
generally small to medium-sized companies faced with inefficiencies resulting in higher
costs to their customers. As larger companies and conglomerates begin to enter the
market, simplified supply channels will help reduce distribution costs allowing for greater
penetration of higher-quality beef products, such as chilled and branded products, at
more affordable prices.
Single-Person Culture: Overall meat consumption is growing among Korean
consumers, and changing demographics dictate how meat is being consumed. Singleperson households account for nearly 25% of the total population, prompting the retail
and foodservice sectors to develop affordable and easy-to-prepare beef dishes for
quality home-meal-replacement (HMR) foods.
Food & Social Media: Food-related blogs, forums and networks are numerous and
heavily utilized by Korean consumers. Social media platforms are powerful tools for
consumer communications regarding food, which presents the opportunity to reach a
broad and diverse audience to highlight and discuss the positive aspects of U.S. beef.
Online Shopping: Online retailing is expected to remain one of the fastest growing
segments as more and more consumers are attracted to this innovative shopping tool
for convenience and price. The demand for beef items, especially chilled products, will
continue to increase with further development of this dynamic retail channel.
Tourism Growth: Korea’s port city of Busan, known for its beaches, nature reserves
and reasonable prices, is a popular destination for both domestic travelers and tourists
from surrounding countries. Moreover, Busan’s vibrant food culture is another attraction,
elevating the use of high-quality beef on high-end restaurant menus.
U.S. Korea Free Trade Agreement: With implementation of the KORUS FTA in 2012,
the duty on U.S. beef over 15 years will decline to zero (from 40%) for muscle cuts and
to 18% for offals. This will help U.S. beef, especially chilled product, increase its
competitive advantage in this high-value market.
Korea Strategic Objectives
 Evolve the “To Trust” campaign to focus more on the positive of attributes of U.S.
beef through “World Class Beef” messaging, highlighting the safety and quality of
U.S. beef, especially to younger consumers/families.
 Build awareness for U.S. chilled and branded beef products and identify opportunities
to introduce and develop the market for new items and preparation techniques/trends
(e.g. American BBQ).
 Promote the use of underutilized cuts that offer both quality and value, especially
compared to domestic beef.
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 Target large foodservice subsectors such as catering services which demand highquality, lower-cost inputs.
 Capitalize on the long-term impact of the KORUS FTA and the U.S. industry’s ability
to provide affordable and consistent supplies of specific cuts.
Korea Tactical Response
 Use traditional and online media to educate buyers and consumers on the quality,
safety and value of U.S. grain-fed beef, particularly chilled beef, and host events
highlighting the eating enjoyment of U.S. beef, leveraging social media forums.
 Connect U.S. beef suppliers to Korean importers through various trade sector
activities, and showcase the advantages of U.S. brands.
 Introduce U.S. chilled and branded beef to 5-star hotels and retail chains looking to
differentiate their offerings, and provide customized support as appropriate.
 Promote economically priced items that can be consistently supplied for large-scale
foodservice, such as hanging tender, chuck flap tail and chuck eye roll.
 Provide training to high-end restaurants and retailers on the handling, cooking and
merchandising of specialty products such as dry-aged U.S. beef.
 Collaborate with chefs to develop premium convenience food and HMR options using
underutilized U.S. beef cuts, and demonstrate the versatility and quality of
economical beef cuts to the foodservice and retail sectors for use in HMR items.
Measurable Objectives: (Target Audiences for Evaluation adjusted for 2015)
o 47% of targeted trade accounts are confident in the consistent supply of U.S. chilled
beef.
o 75% of targeted Korean BBQ & steakhouse accounts feature a (new) U.S. beef item
on the menu.
o 68% of targeted hotel/banquet accounts feature U.S. beef on their menus.
o 75% of targeted retailers merchandise a wide range of U.S. beef items.
Proposed cost*: $1,139,378 (Direct + Estimated Implementation)
Tactic 4N: Market Access – Korea
USMEF will contribute to and support initiatives to eliminate trade-restrictive, nonscience-based policies and requirements in Korea, strengthen confidence in the U.S.
industry as a producer and exporter of beef, and keep the U.S. industry informed on
critical changes in Korean government regulations and emerging issues.
Korea Noteworthy Market Access Issues include a) Korea’s changing feed and drug
registration process, which could affect the status of beta agonists that are commonly
fed to cattle in the U.S.; b) a ban on imports of U.S. beef and beef products from cattle
over 30 months of age; and c) pending issues with under 30-month beef access (such
as processed beef, small intestine, tongue, casings, etc.).
Measurable Objectives:
o USMEF will contribute to and support initiatives to eliminate trade restrictive policies.
o 80% of USMEF members will report that they receive the information they need from
USMEF related to market access.
Proposed cost*: $54,242 (Direct + Estimated Implementation)
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Tactic 4O: Market Development – Mexico
Mexico Background
In 2013, Mexico was the second largest volume market for U.S. beef (after Japan), with
imports (a more accurate measure than U.S. exports) of U.S. beef plus variety meat up
10 percent, reaching 201,833 mt valued at $1.003 billion. U.S. beef represented 90
percent of Mexico’s imported beef market for the year (up from 87 percent in 2012).
The recent economic analysis report of CBB’s demand-enhancing programs by Dr.
Harry Kaiser notes that every dollar invested in export promotion by CBB in Mexico
yielded an increase in gross beef export revenue of $124.78.
Export forecasts for 2014 and 2015 are 228,763 mt valued at $1.029 billion and 245,308
mt valued at $1.140 billion, respectively.
Mexico Market Drivers
Market Diversification: Mexican consumers love beef, and U.S. beef has a highquality, safe image. However, U.S. beef is known mainly for high-end cuts, which limits
the perceived culinary applications. Higher U.S. beef prices, less availability of popular
cuts, and a relatively weak peso have constrained exports to the Mexican market in
recent years. As such, penetrating diverse market segments with a broad range of
products is becoming more important for finding new buyers and shifting consumer
attitudes.
High-end and Specialty Retail: While strong sales at high-end supermarkets
continue, meat boutiques, particularly in northern Mexico, are finding success selling
high-quality U.S. beef on weekends and are looking to increase sales during the
workweek. Further, the implementation of USDA Choice programs at high-end retail
chains has elicited increased purchases from wealthier consumers attracted to the
unparalleled quality, but also undeterred by higher prices.
Record-High Prices: If historically high U.S. beef prices continue, increasing numbers
of Mexican consumers will struggle to afford product even as Mexico’s economy is
expected to grow more robustly. However, supplies of Mexican beef are also severely
limited, so the negative impact of high U.S. beef prices could be partially offset by less
domestic beef available for consumption. Less expensive alternative U.S. beef cuts
could offer restaurateurs and retailers options for serving consumers confronted with
high beef prices.
Chef Product Knowledge: As beef prices remain high, restaurants are forced to look
for ways to keep input costs low. Chefs know about traditional beef cuts, but they do not
realize how the comparative costs, flavor profiles, and recipe options for alternative U.S.
beef cuts could provide cost efficiencies for their menus. Larger restaurant chains are
exploring how U.S. beef can be used more economically to raise customer satisfaction
through consistently enjoyable eating experiences.
Mexico Strategic Objectives
 Train importers, distributors and processors about the attributes, handling, versatility
and profitability of U.S. beef for meeting a wide variety of buyers’ needs.
 Further penetrate the regional supermarket segment, which has not consistently
purchased U.S. beef.
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 Work with restaurant chains to explore new recipes and cooking methods to
maximize profitability (e.g. less waste/purge), and develop new users/uses in
specialty HRI segments that move large volumes of meat.
 Expand programs to highlight new items, possibly including top sirloin, flank steak
and chuck tender.
 Educate retailers on the profit potential of various grades of U.S. beef.
Mexico Tactical Response
 Increase emphasis on value cuts (tri-tip, top sirloin, inside flank) as a substitute for
pricier, more-scarce, high-end middle meats, and offer restaurant management
practical solutions to high U.S. prices and product availability challenges.
 Train HRI and retail managers and staff to ensure U.S. beef is properly presented,
promoted, merchandised, origin-identified and labeled.
 Demonstrate to chefs the flavor performance, cost advantages and recipes for nontraditional cuts.
 Intensify promotions with high-end retail outlets as well as with selected foodservice
distributors whose customers are not as affected by high prices.
 Implement a social media initiative to engage and educate the chef community.
Measurable Objectives:
o 50% of targeted importers/distributors/processors actively promote a range of U.S.
beef cuts, including value cuts, highlighting the products’ quality attributes.
o 60% of targeted restaurant chains actively feature/promote U.S. beef, including
value cuts, to their customers.
o 86% of targeted retailers consistently incorporate suggested merchandizing methods
to promote U.S. beef to their customers.
Proposed cost*: $1,334,878 (Direct + Estimated Implementation)
Tactic 4P: Market Access – Mexico
USMEF will contribute to and support initiatives to eliminate and prevent the imposition
of trade-restrictive policies, regulations and procedures in Mexico, and keep the U.S.
industry informed about critical changes in Mexican government requirements and
emerging issues.
Mexico Noteworthy Market Access Issues include a) possible animal ID and traceability
requirements, which could impede U.S. beef exports; b) yet to be implemented
maximum residue levels; and c) proposed changes to inspection procedures.
Measurable Objectives:
o USMEF will contribute to and support initiatives to eliminate trade restrictive policies.
o 80% of USMEF members will report that they receive the information they need from
USMEF related to market access.
Proposed cost*: $59,242 (Direct + Estimated Implementation)
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Tactic 4Q: Market Development – Middle East
Middle East Background
In 2013, U.S. beef plus variety meat exports to the Middle East region were 147,696 mt
valued at $276 million, a decline of 3 percent in volume and 17 percent in value. Egypt
remained by far the largest market in the region at 136,884 mt (-1 percent) valued at
$165 million (-24 percent). Exports to the UAE jumped in value reaching $55 million
(+12 percent), even though volume declined 4 percent to 5,010 mt. Saudi Arabia
remained closed to U.S. beef throughout the year following the 2012 BSE case in the
U.S.
Export forecasts for 2014 and 2015 are 137,466 mt valued at $219.8 million and
142,644 mt valued at $256.6 million, respectively.
Middle East Market Drivers
Demand for High-quality Imported Food: The Middle East imports a large share of
its food to meet growing demand for premium items, including high-quality beef muscle
cuts. The region’s large youth population is driving many of the trends in the food &
beverage industry, with social media helping shape attitudes.
Foodservice Expansion: The region’s flourishing HRI sector is a reflection of growing
tourism and demand for new dining concepts. However, lack of knowledge about highquality ingredients among foodservice staff and high staff turnover are major issues.
Upper-end HRI operations require cost efficiency, but will not compromise on taste and
quality, leading to increased interest in alternative cuts. Meanwhile, casual dining and
fast food chains are booming, with lower-end, family-style restaurants now the top
destination for utility grade middle meats.
Retail Sector Growth: Retail growth, including international chains, continues at a
rapid pace, with larger stores, such as hypermarkets, set to dominate market share over
the next five years. There has been a remarkable change in shopping habits as
consumers increasingly seek the convenience, ambience, and wider variety of products
offered by the modern retail grocery segment. However, local distributors have been
hesitant to promote U.S. beef muscle cuts with retailers because they lack the
marketing and merchandising knowledge to effectively penetrate this sector. Some
major retailers are importing beef directly from the U.S., diversifying their product
offerings to include traditional and alternative cuts.
Potential Supply Shortages and Record-High Prices: Higher prices have impacted
muscle cut business to Egypt, traditionally the region’s largest importer of these items.
With limited purchasing power and a local currency that has steadily devalued against
the U.S. dollar over the last two years, this large market will remain very price sensitive.
However, the average price paid for U.S. beef cuts by other countries in the region is
the highest in the world, and demand continues to grow with little to no price sensitivity.
There continue to be large infrastructure projects, in addition to the growing local
populations and steadily increasing tourism, with very high dependence on imports to
cover meat consumption needs.
Middle East Strategic Objectives
 Educate chefs and consumers about various muscle cuts and on proper cooking
techniques to avoid overcooking—a common problem in the region.
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 Increase demand for underutilized cuts and end-meats (e.g. shoulder clod, chuck roll,
chuck tender, brisket, top round) by providing training and establishing acceptance of
these items.
 Tap into growth potential in franchise restaurants for chuck roll, petite tender
medallions and thin cuts.
 Use the internet and social media to promote U.S. beef in Egypt and across the
region.
Middle East Tactical Response
 Emphasize muscle cuts for dining outlets, especially those producing their own
burgers (e.g. using U.S. chuck), as well as “shawarma” eateries. For fine dining
outlets, steakhouses and family-style chains, focus on middle- and end-meat cuts.
 Support in-store promotions with a goal of consistent, year-round sales of chilled U.S.
beef, using cooking demonstrations and tastings to showcase rib-eye, top sirloin butt,
chuck roll, heel, shank and striploin.
 In Egypt, continue to reinforce the image of U.S. beef muscle cuts as the best quality
option, so that while consumers might buy less often due to price considerations,
many more consumers will seek out the product.
Measurable Objectives:
o 53% of targeted importers/distributors have a favorable attitude toward U.S.
beef/bvm based on information provided by USMEF.
o 77% of targeted HRI buyers regularly purchase U.S. beef/bvm.
o 50% of targeted fine dining and casual family-style restaurants/chains hold a U.S.
beef promotion or use menu promotional materials.
o 50% of targeted retail chains identify the origin of U.S. beef/bvm and actively
participate in USMEF promotions.
Proposed cost*: $537,662 (Direct + Estimated Implementation)
Tactic 4R: Market Access – Middle East
USMEF will contribute to and support initiatives to eliminate trade-restrictive policies
and requirements in the Middle East, build and reinforce the region’s confidence in the
U.S. industry as a producer and exporter of beef, and keep the U.S. industry informed
on critical changes in local government regulations and emerging issues in the region.
Middle East Noteworthy Market Access Issues include Saudi Arabia’s U.S. beef due to
the April 2012 atypical BSE finding in the United States.
Measurable Objectives:
o USMEF will contribute to and support initiatives to eliminate trade restrictive policies.
o 80% of USMEF members will report that they receive the information they need from
USMEF related to market access.
Proposed cost*: $9,268 (Direct + Estimated Implementation)
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Tactic 4S: Market Development – Russia / Greater Russian Region
Russia/Greater Russian Region Background
U.S. beef exports to Russia ground to a halt in February 2013 following an unresolved
trade dispute over ractopamine residues. While Russian demand for U.S. beef was at
an all-time high in 2012, U.S. beef plus variety meat exports to the Russian region in
2013 dropped 94 percent in volume to 4,686 mt and 98 percent in value to $5.9 million.
Meanwhile, other countries in the region started growing in importance, such as
Ukraine, where U.S. beef exports increased 134 percent to 1,990 mt.
The recent economic analysis report of CBB’s demand-enhancing programs by Dr.
Harry Kaiser notes that every dollar invested in export promotion by CBB in Russia
yielded an increase in gross beef export revenue of $14.34.
Export forecasts for 2014 and 2015 are 3,300 mt valued at $10.5 million and 4,350 mt
valued at $20.2 million, respectively.
Russia/Greater Russian Region Market Drivers
Russia remains closed to U.S. beef due to its zero tolerance for ractopamine residues.
Further, Russia is striving to harmonize its food safety standards with those of the EU
and will not allow the use of hormones in beef production. Thus U.S. beef’s return to
Russia is not expected in the near term, and exporters could face significant constraints
once the market opens. However, when access is restored, USMEF will again intensify
its marketing activities to reassert the presence of U.S. beef in Russia.
Regional Expansion: In addition to long-term customer retention work in Russia,
USMEF has shifted its focus to other markets in the region, including Ukraine, Georgia,
Azerbaijan and some Central Asian nations. In those countries with higher levels of beef
consumption, opportunities for developing sales of high-quality U.S. beef are growing. In
addition, several countries have strong traditions of utilizing offal products, indicating
potential areas for growth for U.S. beef variety meat exports into the processing, HRI
and retail sectors.
Foodservice Opportunities: The HRI sector is almost entirely dependent on imported
beef, and interest in high quality beef and variety meats continues to grow. With the
current absence of both U.S. and Australian beef in Russia, the ability to offer high
quality beef on the menu is very limited for restaurants. There is a real threat that a
prolonged ban may lead many establishments to switch from steak to other types of
cuisine. At the same time, HRI industry players continue to note that U.S. beef is among
the best products and that market share will be regained once the situation normalizes.
The solid reputation that U.S. beef has in Russia suggests that many restaurants will
return U.S. beef to their menus when the market reopens. Meanwhile, as U.S. veal still
has access to the Russian market, some high-end establishments have started to
incorporate it into their menu concepts.
Russia/Greater Russian Region Strategic Objectives
 Regain market share in Russia once the market reopens, and restore buyer
knowledge/confidence.
 Build U.S. beef sales in the region, including variety meats and cuts for processing,
focusing on Uzbekistan, Ukraine, Georgia and Azerbaijan.
 Demonstrate to larger processors how U.S. beef can meet their needs, and gather
market intelligence on what attributes are most important (such as better packaging).
 Continue to focus on new opportunities, including increased alternative cut usage,
growth in chilled beef at retail, and online meat shops.
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Russia/Greater Russian Region Tactical Response
 Create demand in the Russian region for a greater variety of beef cuts and grades, as
well as expand the number of foodservice and retail outlets selling U.S. beef and/or
veal.
 Engage more restaurants to try U.S. beef, such as alternative cuts for family-style
dining and catering.
 Train chefs on proper cooking techniques (e.g. not to overcook), and how to
differentiate high quality, marbled U.S. beef from competing product.
 Work with local importers/processors on expanding uses for U.S. beef (e.g. for
portion control, as well as lower grade muscle cuts for processing).
Measurable Objectives: (Goals will be reexamined/updated based on market conditions)
o 77% of targeted trade accounts understand U.S. beef’s quality attributes based on
information provided by USMEF.
o 75% of targeted HRI outlets/restaurant chains regularly stock U.S. beef.
o 69% of targeted retail outlets identify the origin of U.S. beef.
o 38% of targeted retail outlets actively promote U.S. beef and its origin.
Proposed cost*: $231,636 (Direct + Estimated Implementation)
Tactic 4T: Market Access – Russia / Greater Russian Region
USMEF will contribute to and support initiatives to eliminate trade-restrictive Russian
policies and requirements, and keep the U.S. industry informed on critical changes in
Russian government regulations and emerging issues.
Russian Region Noteworthy Market Access Issues include a) Russia’s zero tolerance
policy on the presence of beta-agonists and synthetic hormones in beef; b) Russia’s
near zero tolerance policy on the presence of selected pathogens (e.g., Salmonella);
and c) Russia’s longstanding BSE-related restrictions on imports of U.S. beef.
Measurable Objectives:
o USMEF will contribute to and support initiatives to eliminate trade restrictive policies.
o 80% of USMEF members will report that they receive the information they need from
USMEF related to market access.
Proposed cost*: $21,804 (Direct + Estimated Implementation)
Tactic 4U: Market Development – South America
South America Background
In 2013, exports of U.S. beef plus variety meat to the South America region increased
29 percent in volume to 34,794 mt, with value up 19 percent to $116 million. Peru was
the largest volume market in the region, with exports up 35 percent to 17,352 mt, and
value up 10 percent to $33 million. Chile was the largest value market, with exports up
16 percent to $69 million, and volume up 13 percent to 12,908 mt.
Export forecasts for 2014 and 2015 are 36,911 mt valued at $126.1 million and 38,981
mt valued at $135.5 million, respectively.
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South America Market Drivers
Growing Markets: Strong economic growth and expanding populations mean the
region’s middle class has more money to spend on premium food items. In Peru and
Chile, consumers are already willing to pay higher prices for high-quality beef, and
interest is developing in other markets. Although U.S. beef exports to South America
have grown dramatically in the past few years, many market segments are still
unfamiliar with U.S. beef, especially key buyers in the foodservice sector, and inefficient
handling and lack of product knowledge have sometimes resulted in low yields.
Cold Chain Management: The lack of proper cold chain management in some areas
could limit the market for high quality products. In particular, retailers and restaurateurs
outside capital cities often do not follow acceptable handling practices. Further, several
retailers in the region are exploring direct import opportunities with U.S. suppliers as a
cost saving measure. While this is a positive development, some stores are struggling
with maintaining product integrity, mainly because of the high turnover rate among meat
department personnel.
Potential Supply Shortages and Record-High Prices: With buyers in other U.S. beef
export destinations often willing to pay higher prices for product than in South America,
the lack of availability of some items (e.g. tongue, heart, knuckle, tri-tip) is threatening to
dampen market penetration. For example, Olive Garden restaurant recently opened in
Peru, and after working with USMEF to purchase U.S. beef, pricing and sourcing issues
caused the franchise to switch to Uruguayan beef just prior to opening. Additionally,
other restaurants are now unable to source U.S. knuckle, an item USMEF successfully
introduced into the market.
Smaller Packaging at Retail: With high meat prices, some consumers are looking to
purchase smaller quantities at affordable prices. Convenient sized packaging for chilled
product—using the latest technologies to extend shelf life—could help draw more
consumers to U.S. beef in the supermarket meat case.
U.S.-Colombia Free Trade Agreement: This FTA provides duty-free access for
unlimited volumes of high quality beef (Choice/Prime), and duty-free tariff rate quotas
for beef other than Choice/Prime and (separately) for beef offal. Although Colombia is
still a small market, exports in 2013 increased dramatically, jumping nearly 200 percent
in volume (2,734 mt) and 171 percent in value ($9.1 million). For this price-driven
market, a focus on affordable cuts that deliver quality is essential.
South America Strategic Objectives
 Educate importers, distributors and other market stakeholders about the profitability
of U.S. beef value cuts and provide training on the proper handling and
merchandising of unfamiliar cuts.
 Work to substitute higher-quality alternative U.S. beef for local traditional cuts to
maintain quality and margins in restaurants.
 Identify and promote U.S. beef cuts at retail by improving product labels and
maintaining product rotation to increase consumer confidence.
 Facilitate sales by conducting activities that directly bring buyers together with U.S.
suppliers, especially medium/small suppliers interested in growing exports to South
America.
 Continue to focus on new opportunities, including identifying niche markets for highend products.
1516-FM – Page 23
AR# 1516-FM
South America Tactical Response
 Provide training on proper meat handling and cold chain development for the HRI and
retail sectors to help mitigate problems and ensure that consumers enjoy a positive
experience with U.S. beef.
 Demonstrate to importers and purveyors that portion and repackage U.S. beef for
distribution to end-consumers how to use the latest available technologies to
preserve quality.
 Continue working with supermarket chains to increase the number of U.S. cuts
offered.
 Utilize joint promotions to raise the visibility and image of U.S. beef in the market.
 Expand activities into secondary cities in key markets.
Measurable Objectives: (Target Audiences for Evaluation adjusted for 2015)
o 53% of targeted importers/distributors consistently source U.S. beef.
o 47% of targeted HRI outlets/chains regularly use U.S. beef.
o 60% of targeted retailers identify the origin and promote the attributes of U.S. beef.
Proposed cost*: $193,306 (Direct + Estimated Implementation)
Tactic 4V: Market Access – South America
USMEF will contribute to and support initiatives to eliminate trade-restrictive policies
and requirements in the South America region, and keep the U.S. industry informed of
critical changes in South American government regulations and emerging issues in the
region.
South America Noteworthy Market Access Issues include a) BSE-related restrictions on
U.S. beef imports in some countries in the region; and b) Chile’s restrictive beef labeling
requirements.
Measurable Objectives:
o USMEF will contribute to and support initiatives to eliminate trade restrictive policies.
o 80% of USMEF members will report that they receive the information they need from
USMEF related to market access.
Proposed cost*: $4,634 (Direct + Estimated Implementation)
Tactic 4W: Market Development – Taiwan
Taiwan Background
In 2013, U.S. beef plus variety meat exports to Taiwan increased 65 percent in volume
to 32,181 mt, and 98 percent in value to $254 million. U.S. market share of the imported
beef market jumped from 21 to 34 percent, taking share away from Australia and New
Zealand.
The recent economic analysis report of CBB’s demand-enhancing programs by Dr.
Harry Kaiser notes that every dollar invested in export promotion by CBB in Taiwan
yielded an increase in gross beef export revenue of $29.14.
Export forecasts for 2014 and 2015 are 30,160 mt valued at $250.2 million and 32,139
mt valued at $270.5 million, respectively.
1516-FM – Page 24
AR# 1516-FM
Taiwan Market Drivers
Consumer Confidence: Despite past negative media portrayals and anti-U.S. beef
campaigns, the perception of U.S. beef has been gradually improving, with market
share growing as restaurants and retailers resume sales following the adoption of a
maximum residue level (MRL) for ractopamine in 2012.
Quality & Niche Product Growth: Consumer purchasing behaviors continue to evolve
as the increased interest in new tastes and products shifts, and the focus on health,
quality and value grows. As such, brands, natural/organic meat, and specialty breeds
are becoming more popular.
Western Dining: Throughout Taiwan, there is a growing presence of Western-style
restaurants, many of which predominately feature U.S. beef on their menus. High-end
dining establishments are looking to add value and uniqueness to menus through the
use of new-to-market cuts and preparations, including dry-aged beef.
Alternative Cuts: Increased demand in Japan and Korea for Asia-specific cuts such as
chuck flap, top blade and boneless chuck short ribs are driving family-style restaurants
and retail operators to seek alternative beef products that provide high quality at a
competitive price.
Online Retail: Online shopping is booming for consumers in Taiwan because of its
convenience, product availability and economically priced items. As greater efficiencies
in customer service attract more shoppers, the promotion of lower-cost items such as
underutilized beef cuts is expected to expand.
Mainland Tourism: The number of mainland Chinese tourists traveling to Taiwan
reached a record high of nearly three million people in 2013. The Tourism Bureau of
Taiwan anticipates mainland tourism to increase 17 percent in 2014, which is a
welcome sign for the foodservice sector as Chinese tourists enjoying dining out at a
variety of establishments ranging from beef noodle shops to high-end restaurants.
Taiwan Strategic Objectives
 Educate key commercial stakeholders (importers, restaurants, retailers) on U.S. beef
production safety.
 Introduce alternative high-quality U.S. beef cuts to targeted HRI buyers, such as
ribeye cap and petite tender.
 Reintroduce buyers and consumers to the various grades U.S. chilled beef (Select,
Choice, Prime) and highlight the versatility and profitability compared to the
competition.
 Broaden awareness of U.S. niche beef items, including natural/organic, branded and
breed-specific products.
 Educate the foodservice sector on dry aging for cuts beyond short-loin, such as
ribeye and tenderloin.
 Continue to build relationship with HRI accounts in scenic/tourist areas, especially
those restaurants that have high media exposure and are nationally well-known.
 Utilize a unified theme and messages to create a favorable image of U.S. beef
among consumers.
Taiwan Tactical Response
 Sponsor activities at leading restaurants to improve the market atmosphere and
rebuild confidence among consumers and other foodservice chains.
1516-FM – Page 25
AR# 1516-FM
 Develop educational and POS materials to support the use of chilled U.S. beef,
including underutilized cuts, by the trade and their downstream partners, and
encourage chefs to feature U.S. chilled beef in traditional and western-style cuisine.
 Work with high-end HRI accounts on the utilization, preparation and promotion of
specialty U.S. beef items such as branded, dry-aged, and natural/organic products.
 Introduce top chefs in tourist regions to the range and quality of available U.S. beef
cuts.
 Target younger consumers through events and social media to promote
venues/menus featuring U.S. beef, and use PR activities to illustrate that more and
more Taiwanese consumers accept and enjoy U.S. beef.
Measurable Objectives:
o 87% of targeted trade accounts have a favorable attitude toward U.S. beef based on
information provided by USMEF.
o 62% of targeted trade accounts collaborate with downstream customers to promote
U.S. beef.
o 40% of targeted restaurants actively participate in and contribute to USMEF
promotions to their customers.
o 46% of targeted retailers actively promote the attributes of U.S. beef.
Proposed cost*: $727,490 (Direct + Estimated Implementation)
Tactic 4X: Market Access – Taiwan
USMEF will contribute to and support initiatives to eliminate trade-restrictive policies
and requirements in Taiwan, strengthen confidence in the U.S. industry as a producer
and exporter of beef, and keep the U.S. industry informed on critical changes in Taiwan
government regulations and emerging issues.
Taiwan Noteworthy Market Access Issues include a) BSE-related restrictions on imports
of U.S. ground beef and variety meat; b) Taiwan’s zero tolerance policy on the presence
of zilpaterol residues in beef imports; and c) agricultural trade discussions related to the
U.S.-Taiwan Trade and Investment Framework Agreement.
Measurable Objectives:
o USMEF will contribute to and support initiatives to eliminate trade restrictive policies.
o 80% of USMEF members will report that they receive the information they need from
USMEF related to market access.
Proposed cost*: $59,510 (Direct + Estimated Implementation)
Tactic 4Y: New Market Research & Development
Existing USMEF programs and activities cover approximately 100 countries which
represent the majority of U.S. beef exports. However, as the global economy improves,
additional markets, as well as new segments in existing markets, continue to emerge,
providing increased development opportunities for U.S. beef. In addition to these
opportunities, further research in key strategic markets with high potential, such as
China, will position the U.S. industry for rapid expansion and displacement of
competitive products.
1516-FM – Page 26
AR# 1516-FM
Shifting global dynamics, rapid development in areas such as Sub-Saharan Africa, and
improving regional economies continue to provide new growth opportunities for the beef
industry. In order to identify, develop and capitalize on additional growth opportunities in
global markets for U.S. beef, USMEF will employ the following tactics: A) Conduct
market, economic and technical research to identify and develop new opportunities for
U.S. beef exports; and B) Educate and support targeted buyers in new markets about
the quality of U.S. beef products and the commitment of the U.S. industry to building
and maintaining supply relationships.
Proposed cost*: $75,000 (Direct + Estimated Implementation)
IV.
DETAILED BUDGET SUMMARY
Beef Board/BPOC Funding Request:
Funding
Manager
Completion
Date
Tactic 4A: ASEAN MD
USMEF
09/30/15
$142,545
$96,548
$239,093
Tactic 4B: ASEAN MA
USMEF
09/30/15
$0
$10,728
$10,728
Tactic 4C: Caribbean MD
USMEF
09/30/15
$92,207
$19,310
$111,517
Tactic 4D: Caribbean MA
USMEF
09/30/15
$0
$2,146
$2,146
Tactic 4E: Central America MD
USMEF
09/30/15
$199,156
$57,929
$257,085
Tactic 4F: Central America MA
USMEF
09/30/15
$3,258
$6,437
$9,695
Tactic 4G: China/HK MD
USMEF
09/30/15
$271,447
$77,238
$348,685
Tactic 4H: China/HK MA
USMEF
09/30/15
$8,145
$8,582
$16,727
Tactic 4I: Europe MD
USMEF
09/30/15
$238,825
$96,548
$335,373
Tactic 4J: Europe MA
USMEF
09/30/15
$1,629
$10,728
$12,357
Tactic 4K: Japan MD
USMEF
09/30/15
$2,036,364
$617,908
$2,654,272
Tactic 4L: Japan MA
USMEF
09/30/15
$40,727
$68,656
$109,383
Tactic 4M: Korea MD
USMEF
09/30/15
$677,050
$251,025
$928,075
Tactic 4N: Korea MA
USMEF
09/30/15
$16,291
$27,892
$44,183
Tactic 4O: Mexico MD
USMEF
09/30/15
$836,294
$251,025
$1,087,319
Tactic 4P: Mexico MA
USMEF
09/30/15
$20,364
$27,892
$48,256
Tactic 4Q: Middle East MD
USMEF
09/30/15
$399,331
$38,619
$437,950
Tactic 4R: Middle East MA
USMEF
09/30/15
$3,258
$4,291
$7,549
Tactic 4S: Russia MD
USMEF
09/30/15
$72,821
$115,857
$188,678
Tactic 4T: Russia MA
USMEF
09/30/15
$4,887
$12,873
$17,760
Tactic 4U: South America MD
USMEF
09/30/15
$138,147
$19,310
$157,457
Tactic 4V: South America MA
USMEF
09/30/15
$1,629
$2,146
$3,775
Tactic 4W: Taiwan MD
USMEF
09/30/15
$302,928
$289,644
$592,572
Tactic 4X: Taiwan MA
USMEF
09/30/15
$16,291
$32,183
$48,474
Tactic 4Y: New Markets
USMEF
09/30/15
$61,091
-
$61,091
$5,584,685
$2,145,515
$7,730,200
Summary by Strategy & Tactic
Total
Direct Cost
Est.
Impl.
Total
Strategy 4: Global Growth Opportunities
Totals - Strategy 4
1516-FM – Page 27
AR# 1516-FM
Other Potential Funding Source(s): (Informational only)
Funding
Source *
Completion
Date
Tactic 4A: ASEAN MD
FSBC
09/30/15
$32,455
$21,982
$54,437
Tactic 4A: ASEAN MD
USDA
12/31/15
$275,730
-
$275,730
Tactic 4B: ASEAN MA
FSBC
09/30/15
-
$2,442
$2,442
Tactic 4C: Caribbean MD
FSBC
09/30/15
$20,993
$4,396
$25,389
Tactic 4C: Caribbean MD
USDA
12/31/15
$180,475
-
$180,475
Tactic 4D: Caribbean MA
FSBC
09/30/15
-
$488
$488
Tactic 4E: Central America MD
FSBC
09/30/15
$45,344
$13,189
$58,533
Tactic 4E: Central America MD
USDA
12/31/15
$219,595
-
$219,595
Tactic 4F: Central America MA
FSBC
09/30/15
$742
$1,465
$2,207
Tactic 4G: China/HK MD
FSBC
09/30/15
$61,803
$17,586
$79,389
Tactic 4G: China/HK MD
USDA
12/31/15
$346,930
-
$346,930
Tactic 4H: China/HK MA
FSBC
09/30/15
$1,855
$1,954
$3,809
Tactic 4I: Europe MD
FSBC
09/30/15
$54,375
$21,982
$76,357
Tactic 4I: Europe MD
USDA
12/31/15
$400,060
-
$400,060
Tactic 4J: Europe MA
FSBC
09/30/15
$371
$2,442
$2,813
Tactic 4K: Japan MD
FSBC
09/30/15
$463,636
$140,684
$604,320
Tactic 4K: Japan MD
USDA
12/31/15
$4,978,290
-
$4,978,290
Tactic 4L: Japan MA
FSBC
09/30/15
$9,273
$15,632
$24,905
Tactic 4L: Japan MA
USDA
12/31/15
$50,000
-
$50,000
Tactic 4M: Korea MD
FSBC
09/30/15
$154,150
$211,303
Tactic 4M: Korea MD
USDA
12/31/15
$1,158,115
$57,153
-
$1,158,115
Tactic 4N: Korea MA
FSBC
09/30/15
$3,709
$6,350
$10,059
Tactic 4N: Korea MA
USDA
12/31/15
$20,000
-
$20,000
Tactic 4O: Mexico MD
FSBC
09/30/15
$190,406
$57,153
$247,559
Tactic 4O: Mexico MD
USDA
12/31/15
$972,650
-
$972,650
Tactic 4P: Mexico MA
FSBC
09/30/15
$4,636
$6,350
$10,986
Tactic 4Q: Middle East MD
FSBC
09/30/15
$90,919
$8,793
$99,712
Tactic 4Q: Middle East MD
USDA
12/31/15
$461,220
-
$461,220
Tactic 4R: Middle East MA
FSBC
09/30/15
$742
$977
$1,719
Tactic 4S: Russia MD
FSBC
09/30/15
$16,579
$26,379
$42,958
Tactic 4S: Russia MD
USDA
12/31/15
$248,660
-
$248,660
Tactic 4T: Russia MA
FSBC
09/30/15
$1,113
$2,931
$4,044
Tactic 4U: South America MD
FSBC
09/30/15
$31,453
$4,396
$35,849
Tactic 4U: South America MD
USDA
12/31/15
$170,450
-
$170,450
Tactic 4V: South America MA
FSBC
09/30/15
$371
$488
$859
Tactic 4W: Taiwan MD
FSBC
09/30/15
$68,972
$65,946
$134,918
Tactic 4W: Taiwan MD
USDA
12/31/15
$491,325
-
$491,325
Tactic 4X: Taiwan MA
FSBC
09/30/15
$3,709
$7,327
$11,036
Tactic 4Y: New Markets
FSBC
09/30/15
$13,909
-
$13,909
Summary by Strategy & Tactic
Total
Direct Cost
Est.
Impl.
Total
Strategy 4: Global Growth Opportunities
Totals - Strategy 4
$11,245,015
$488,485
$11,733,500
* USMEF’s USDA/MAP proposed FY15 beef activity funding is shown. In addition to the totals listed, USMEF may also receive
funding from various state beef councils and corn industry groups.
1516-FM – Page 28
AR# 1516-FM
Total Cost Summary for All Funding Sources: (Informational only)
Funding
Source **
Completion
Date
BPOC/FSBC
09/30/15
$175,000
Tactic 4A: ASEAN MD
USDA
12/31/2015
Tactic 4B: ASEAN MA
BPOC/FSBC
09/30/15
Tactic 4C: Caribbean MD
BPOC/FSBC
Tactic 4C: Caribbean MD
Tactic 4D: Caribbean MA
Tactic 4E: Central America MD
Summary by Strategy & Tactic
Total
Direct Cost
Est.
Impl.
Total
Strategy 4: Global Growth Opportunities
Tactic 4A: ASEAN MD
$118,530
$293,530
$275,730
-
$275,730
-
$13,170
$13,170
09/30/15
$113,200
$23,706
$136,906
USDA
12/31/2015
$180,475
-
$180,475
BPOC/FSBC
09/30/15
-
$2,634
$2,634
BPOC/FSBC
09/30/15
$244,500
$71,118
$315,618
Tactic 4E: Central America MD
USDA
12/31/2015
$219,595
-
$219,595
Tactic 4F: Central America MA
BPOC/FSBC
09/30/15
$4,000
$7,902
$11,902
Tactic 4G: China/HK MD
BPOC/FSBC
09/30/15
$333,250
$94,824
$428,074
Tactic 4G: China/HK MD
USDA
12/31/2015
$346,930
-
$346,930
Tactic 4H: China/HK MA
BPOC/FSBC
09/30/15
$10,000
$10,536
$20,536
Tactic 4I: Europe MD
BPOC/FSBC
09/30/15
$293,200
$118,530
$411,730
Tactic 4I: Europe MD
USDA
12/31/2015
$400,060
-
$400,060
Tactic 4J: Europe MA
BPOC/FSBC
09/30/15
$2,000
$13,170
$15,170
Tactic 4K: Japan MD
BPOC/FSBC
09/30/15
$2,500,000
$758,592
$3,258,592
Tactic 4K: Japan MD
USDA
12/31/2015
$4,978,290
-
$4,978,290
Tactic 4L: Japan MA
BPOC/FSBC
09/30/15
$50,000
$84,288
$134,288
Tactic 4L: Japan MA
USDA
12/31/15
$50,000
-
$50,000
Tactic 4M: Korea MD
BPOC/FSBC
09/30/15
$831,200
$1,139,378
Tactic 4M: Korea MD
USDA
12/31/2015
$1,158,115
$308,178
-
Tactic 4N: Korea MA
BPOC/FSBC
09/30/15
$20,000
$34,242
$54,242
Tactic 4N: Korea MA
USDA
12/31/2015
$20,000
-
$20,000
Tactic 4O: Mexico MD
BPOC/FSBC
09/30/15
$1,026,700
$308,178
$1,334,878
Tactic 4O: Mexico MD
USDA
12/31/15
$972,650
-
$972,650
Tactic 4P: Mexico MA
BPOC/FSBC
09/30/15
$25,000
$34,242
$59,242
Tactic 4Q: Middle East MD
BPOC/FSBC
09/30/15
$490,250
$47,412
$537,662
Tactic 4Q: Middle East MD
USDA
12/31/15
$461,220
-
$461,220
Tactic 4R: Middle East MA
BPOC/FSBC
09/30/15
$4,000
$5,268
$9,268
Tactic 4S: Russia MD
BPOC/FSBC
09/30/15
$89,400
$142,236
$231,636
Tactic 4S: Russia MD
USDA
12/31/15
$248,660
-
$248,660
Tactic 4T: Russia MA
BPOC/FSBC
09/30/15
$6,000
$15,804
$21,804
Tactic 4U: South America MD
BPOC/FSBC
09/30/15
$169,600
$23,706
$193,306
Tactic 4U: South America MD
USDA
12/31/15
$170,450
-
$170,450
Tactic 4V: South America MA
BPOC/FSBC
09/30/15
$2,000
$2,634
$4,634
Tactic 4W: Taiwan MD
BPOC/FSBC
09/30/15
$371,900
$355,590
$727,490
Tactic 4W: Taiwan MD
USDA
12/31/15
$491,325
-
$491,325
Tactic 4X: Taiwan MA
BPOC/FSBC
09/30/15
$20,000
$39,510
$59,510
$1,158,115
Tactic 4Y: New Markets
BPOC/FSBC
09/30/15
$75,000
$75,000
Total BPOC/FSBC
$6,856,200
$2,634,000
$9,490,200
Total USDA
$9,973,500
$9,973,500
Totals - Strategy 4
$16,829,700
$2,634,000
$19,463,700
** To fund its U.S. beef programs globally, USMEF estimates it will need approximately $20 million in FY15 and is requesting
$9,490,200 in beef checkoff funding (direct plus implementation).
1516-FM – Page 29
AR# 1516-FM
V. SUPPLEMENTAL INFORMATION
A. Will all of the work detailed in this AR be completed by the end of the fiscal year?
If not, please provide an explanation.
The objectives are expected to be achieved, though they are part of longer term
strategies which will continue into the next fiscal year.
B. Changes from FY 2014 Approved AR:
USMEF continually monitors current market conditions and adjusts strategies as
appropriate. When establishing global priorities, USMEF analyzes the marketing
environment in each of the primary export markets by considering a variety of factors
such as market size (export volume/value), U.S. market share, current and mediumterm (3-5 years) market access conditions and competitive environment in each market,
penetration of USMEF’s programs, economic conditions, and cost of doing business.
This method of analysis provides a useful framework for assessing relative opportunities
across different markets and is the starting point for setting global strategic priorities.
USMEF’s plans for FY15 reflect the following strategic priorities: Japan continues to
provide tremendous potential as a result of the 2013 increase in cattle age limits. Korea
also remains a priority as the industry strives to enhance the image of U.S. beef and
recapture lost market share. Resources will be increased in a) China/Hong Kong to lay
the groundwork for anticipated access improvements; b) Taiwan for the continuation of
programs to rebuild the image of U.S. beef after negative media reporting; and c)
Central & South America as demand for high quality products increases along with
competitive advantages stemming from FTAs. Russia remains closed to U.S. beef, so
activities will be focused on countries in the greater Russian region.
C. Subcontractor information:
Subcontractors are selected using USMEF’s competitive bidding and vendor selection
policies and procedures that include bidding contracts greater than $25,000 at least
every three years. Selection is based on qualifications and reasonableness of cost.
Current contracts over $25,000 are listed below.
Exclamation Graphic
Usaha
Elizabeth Wunderlich
Angie Devorah Ponciano Lavergne
Exotic Marketing Group
Strategos
China Ag University
Rachel Deng
Felipe Macias
Monty Brown
Sauce Communications
T20 Media
Tabloid Ltd
Adecco
Alvis
Asatsu-DK
Cookpad
Dai Nippon
Daisho
Dentsu
Eire Systems
Foodlink Corporation
Image
IPSOS
POS Production
Travel Agency
Regional Consultant
Regional Consultant
PR Agency
Marketing & logistics agency
Research
Foodservice Consultant
Regional Consultant
Meat Consultant
PR
Online Marketing
Internet PR/research
Staffing Agency
Technical Translation
Ad/Promotion Agency
Culinary Website
Printing
Sauce Maker/Processor
Ad Agency
IT Support
Distributor
Website Coordinator
Research Firm
1516-FM – Page 30
ASEAN
ASEAN
Caribbean
Central America + DR
Central America + DR
Central America + DR
China/HK
China/HK
Europe
Europe
Europe
Europe
Europe
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
AR# 1516-FM
JTB Metropolitan
Kinki Nippon Tourist
Moranbong
Nihon Shokken Co., Ltd.
Office K2M
Sakaki Lab
Showa Sangyo
SP Ring
Tokyu Agency
Topfield Marketing
CDS-Daymon Worldwide
Creative May
Gallup
GroupM
Heungseo Industry Co.
JNF Design
Korea Sauce
Sharp Aviation
Tae-Pyeong Salt
Weber Shandwick
WithM
Yujin Metro
Zestn
Alberto de Jesus Diaz Cadena
Burson Marsteller
Eric Vallejo Ramirez
Guillermo Jorge Angeles Arredondo
ITESM
Juan Carlos Prieto Williams
Litografia Gil
Martin Rogelio Ceballos Muñoz
Media Design Latinoamericana
Pablo Chavarria Solorio
PROCONSA
Promo Conceptos
Sylvia Basaldua Pohlenz
Uniformes de Servicio Corporativo
Yona Marcos Dabbah Faena
Agri Marketing International
Arab Marketing & Finance, Inc.
Jessica Julca
Interface Comm
JWT
New Idea Design
Wise Consulting
Travel Agency
Travel Agency
Sauce Manufacturer/Processor
Sauce Manufacturer/Processor
PR Agency
Publication Development
Seasoning Manufacturer
Marketing Agency
Ad Agency
Research/Publishing
In-store Promotions
Ad/POS Production
Surveys
Radio Advertising
Booth Constructor
Printing Design/Production
Sauce Manufacturer
Travel Agency
Seasoning Manufacturing
PR/Advertising
Retail Promotion/POS Production
Subway Advertising
Cooking Classes
Translation
Public Relations
Meat Consultant
Graphic Design/Production
Meat Training Seminars
Media Consulting/PR
Printing services
Promotional/POS Materials
Marketing Agency
POS Material/Printing
IT Services
Promotions
Graphic Design/Production
Uniforms, Logo Clothing
Promotional/POS Materials
Regional Consultant
Regional Consultant
Regional Representative
Media/Publishing
Marketing Agency
POS Production
Public Relations
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Japan
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Korea
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Middle East
Middle East & Russia Region
South America
Taiwan
Taiwan
Taiwan
Taiwan
D. Identify any relationships between this AR and projects previously funded by the
Operating Committee:
This AR is a continuation of the strategy and tactics currently underway.
1516-FM – Page 31
AR# 1516-FM
E. Summary of Prior Year AR Budgets and Expenses:
Summary by
Strategy & Tactic
Strategy 4: Global Growth
Opportunities
FY 2014 Approved Budgets
CBB/BPOC
FSBCs
Other
(USDA/MAP)
Total
Direct Cost
Impl.
Total
Tactic 4A: ASEAN MD
$261,098
$62,679
$142,145
$465,922
$301,645
$164,277
$465,922
Tactic 4B: ASEAN MA
$15,378
$3,375
-
$18,753
-
$18,753
$18,753
$105,302
$23,109
$97,945
$226,356
$202,245
$24,111
$226,356
Tactic 4C: Caribbean MD
Tactic 4D: Caribbean MA
$2,197
$482
-
$2,679
-
$2,679
$2,679
Tactic 4E: Central America MD
$235,942
$51,780
$122,710
$410,432
$362,210
$48,222
$410,432
Tactic 4F: Central America MA
$7,674
$1,684
-
$9,358
$4,000
$5,358
$9,358
Tactic 4G: China/HK MD
$315,348
$69,207
$146,575
$531,130
$410,575
$120,555
$531,130
Tactic 4H: China/HK MA
$19,184
$4,211
-
$23,395
$10,000
$13,395
$23,395
$305,417
$67,027
$272,013
$644,457
$548,013
$96,444
$644,457
Tactic 4I: Europe MD
Tactic 4J: Europe MA
$10,427
$2,289
-
$12,716
$2,000
$10,716
$12,716
Tactic 4K: Japan MD
$2,521,826
$567,071
$2,479,958
$5,568,855
$4,934,958
$633,897
$5,568,855
Tactic 4L: Japan MA
$100,318
$22,015
$50,000
$172,333
$100,000
$72,333
$172,333
Tactic 4M: Korea MD
$990,932
$237,244
$2,237,250
$3,465,426
$3,089,750
$375,676
$3,465,426
Tactic 4N: Korea MA
$67,951
$14,913
$20,000
$102,864
$60,000
$42,864
$102,864
$1,077,264
$254,951
$398,580
$1,730,795
$1,378,580
$352,215
$1,730,795
Tactic 4O: Mexico MD
Tactic 4P: Mexico MA
$57,554
$12,631
-
$70,185
$30,000
$40,185
$70,185
Tactic 4Q: Middle East MD
$453,753
$99,580
$269,860
$823,193
$750,860
$72,333
$823,193
Tactic 4R: Middle East MA
$9,871
$2,166
-
$12,037
$4,000
$8,037
$12,037
Tactic 4S: Russia MD
$248,246
$60,659
$120,800
$429,705
$312,300
$117,405
$429,705
Tactic 4T: Russia MA
$15,904
$3,491
-
$19,395
$6,000
$13,395
$19,395
$152,988
$35,923
$35,290
$224,201
$200,790
$23,411
$224,201
Tactic 4U: South America MD
Tactic 4V: South America MA
$6,297
$1,382
-
$7,679
$5,000
$2,679
$7,679
Tactic 4W: Taiwan MD
$519,126
$113,928
$294,290
$927,344
$589,790
$337,554
$927,344
Tactic 4X: Taiwan MA
$73,398
$16,108
-
$89,506
$52,000
$37,506
$89,506
Tactic 4Y: New Markets
Totals - Strategy 4
$61,503
$13,497
-
$75,000
$75,000
-
$75,000
$7,634,898
$1,741,402
$6,687,416
$16,063,716
$13,429,716
$2,634,000
$16,063,716
1516-FM – Page 32
AR# 1516-FM
Summary by
Strategy & Tactic
FY 2014 Actual Expenses (through April 30, 2014)
Strategy 4: Global Growth
Opportunities
CBB/BPOC
Tactic 4A: ASEAN MD
$49,128
Tactic 4B: ASEAN MA
Other ***
(USDA/MAP)
FSBCs
$11,520
Total
Direct Cost
$60,648
$17,388
Impl.
Total
$43,260
$60,648
-
-
-
-
-
-
Tactic 4C: Caribbean MD
$5,241
$1,150
$6,391
$4,479
$1,912
$6,391
Tactic 4D: Caribbean MA
-
-
-
-
-
-
Tactic 4E: Central America MD
$41,417
$9,092
$50,509
$25,431
$25,078
$50,509
Tactic 4F: Central America MA
-
-
-
-
-
-
$83,701
$18,373
$102,074
$19,447
$82,627
$102,074
Tactic 4G: China/HK MD
Tactic 4H: China/HK MA
-
-
-
-
-
-
Tactic 4I: Europe MD
$34,941
$7,670
$42,611
$7,938
$34,673
$42,611
Tactic 4J: Europe MA
-
-
-
-
-
-
Tactic 4K: Japan MD
$309,836
$68,393
$378,229
$94,566
$283,663
$378,229
Tactic 4L: Japan MA
$1,210
$265
$1,475
$1,475
-
$1,475
Tactic 4M: Korea MD
$243,258
$56,267
$299,525
$139,188
$160,337
$299,525
Tactic 4N: Korea MA
$1,314
$288
$1,602
$1,602
-
$1,602
Tactic 4O: Mexico MD
$352,690
$82,921
$435,611
$271,894
$163,717
$435,611
Tactic 4P: Mexico MA
$4,047
$888
$4,935
$4,935
-
$4,935
Tactic 4Q: Middle East MD
$71,104
$15,604
$86,708
$55,825
$30,883
$86,708
Tactic 4R: Middle East MA
$1,973
$433
$2,406
$2,406
-
$2,406
$63,478
$14,090
$77,568
$5,423
$72,145
$77,568
Tactic 4S: Russia MD
Tactic 4T: Russia MA
-
-
-
-
-
-
Tactic 4U: South America MD
$18,859
$4,248
$23,107
$8,391
$14,716
$23,107
Tactic 4V: South America MA
-
-
-
-
-
-
$179,495
$39,401
$218,896
$42,528
$176,368
$218,896
$2,783
$611
$3,394
$3,394
-
$3,394
-
-
-
-
-
-
$1,464,475
$331,214
$1,795,689
$706,310
$1,089,379
$1,795,689
Tactic 4W: Taiwan MD
Tactic 4X: Taiwan MA
Tactic 4Y: New Markets
Totals - Strategy 4
*** Due to late budget allocations from USDA and billing cycle lags, expenses through April are low and not reflective of actual
activities conducted.
F. Historical Summary of Budgets and Expenses (BPOC/Federation only):
Strategy
Total Approved Budgets
FY 2013
FY 2012
FY 2011
Total Actual Expenses
FY 2013
FY 2012
FY 2011
Strategy 4: Global Growth Opportunities
$9,337,072 $8,255,500 $7,625,570 $9,325,718 $8,105,337 $7,604,010
AR Totals
$9,337,072 $8,255,500 $7,625,570 $9,325,718 $8,105,337 $7,604,010
1516-FM – Page 33