Long considered a villain in trade matters, Japan has so far saved the bacon for U.S. meat exporters coping with the Asian financial crisis.
Damage from the economic turmoil could have been extensive.U.S. livestock product exports of $3.531 billion in 1997 to East and Southeast Asia accounted for 52.8 percent total overseas sales. That does not include cattle hides.
BEEF, PORK BEST SELLERS
The big sellers in Asia are beef, beef offal and pork. About $2.9 billion of Asian purchases in 1997 beef, pork and variety meats.
Now almost all countries in the region, except for China with its relatively small market for U.S. meat, and Taiwan, are beset by serious economic difficulties.
Shrinking economies, combined with plunging Asian currencies, pose a severe challenge to U.S. exporters.
Problems have been few so far because of unexpected strength in Japan, the dominant market in Asia.
''Exports of our beef to Japan have stayed fairly strong through May this year, surprisingly strong,'' said an analyst at the Foreign Agricultural Service of the U.S. Department of Agriculture. Following FAS policy, the analyst asked not to be identified.
He noted that 1998 figures are being compared with a low base in early 1997 when the global meat trade was still recovering from the ''mad cow'' crisis in Europe and an E. coli outbreak in Japan. The Asian financial crisis emerged in the second half of 1997.
Japan bought $1.39 billion worth of U.S. beef in 1997, accounting for 55.5 percent of total U.S. beef exports.
The volume of beef sold to Japan has actually increased in 1998, but the value has remained steady as Japanese switch to less expensive cuts. Volume through May was 153,000 tons, worth $581 million.
Consumption by restaurants and take-out businesses has remained strong, though households have cut back on beef purchases.
Japanese imports of U.S. pork by volume fell only 4 percent from January through May, to 73,500 tons. The value of these exports was $261 million.
$681 MILLION IN PORK EXPORTS
Japan purchased $681 million of U.S. pork exports in 1997 by value, $681 million worth.
Total value of U.S. red meat - fresh, chilled and frozen - exported to Japan through May rose 0.8 percent, to $956 million.
Japanese poultry imports from the United States through May rose 30 percent in volume to 45,000 tons but only 8.3 percent in value to $56.7 million, an 8.3 percent increase in value.
The big poultry importer in Asia is Hong Kong. Imports from the United States remained steady in the first five months of 1998 at 189,000 tons and $135 million. It is common knowledge that much of this huge amount is smuggled into mainland China.
As Japan's appetite for U.S. meat remained healthy, the main damage from the Asian economic crisis is coming from South Korea.
The big problem area is beef: Korea's U.S. beef imports plunged 62 percent from January to May this year, to some 15,000 tons.
''Beef is a higher-cost item,'' said the FAS analyst. ''With the economic crisis, they have cut back consumption.''
The South Korean government still promises to fulfill its World Trade Organization commitment to import 187,000 tons of beef this year. Total purchases through May were 27,000 tons.
But the FAS analyst said, ''you look at the number and wonder how they can do it.''
It will be a challenge.
''We need to bow our necks and work harder to move as much as we can,'' said Billy Lloyd, director of technical services at the U.S. Meat Export Federation. ''We should try to increase market share so we can take advantage of it when South Korea recovers.''
CREDIT KEY TO MARKET SHARE
One key to improving market share is the use of U.S. government credit guarantees provided by the USDA. But it appears there will be no more government credit through the fiscal year ending Sept. 30, according to Len Condon, vice president for international trade at the American Meat Institute.
''Then, who knows?'' he said.
Guarantees for Korea in the new fiscal year are also uncertain, he said.
Meat exports elsewhere in Asia have suffered little from the regional crisis because the markets are so small. Indonesia and other Southeast Asian countries have been particularly hard hit by the downturn, but their imports of beef and pork in 1997 amounted to only $25 million.
Still, there is concern about prospects in Southeast Asia.
''In the long term, we expected that Indonesia with its huge population (200 million) could become a big market, but that will probably be delayed,'' said another FAS analyst.
For U.S. meat exports as a whole, robust sales to Mexico, Russia and other countries have eased the pain of lower shipments to Asia. But sales to Russia are doubtful this year.
For the future, he said, exports to Japan are expected to remain steady the rest of this year and pick up in 1999. But South Korea may take two or three years to recover.