Foreign Markets

Many groups looking to start a processing/marketing company will dismiss the possibility of doing business in other countries. However, it is important to not overlook markets that represent positive opportunities. When compared to beef, pork has been slow to develop its exporting muscles. But in recent years, pork exports have seen explosive growth particularly in the Pacific Rim regions. Obviously, Japan is the largest customer for U.S. pork, but many other countries in eastern Asia are purchasing very significant volumes.

When looking to market products or service, one key consideration is whether you will expand the market or simply compete to replace someone who is already there. A chief goal of any marketing plan should be to find your own space in the market. That is the true niche approach. Due to the growth potential in emerging foreign markets, there is much more potential for this add-on market.

The foreign market sector is filled with unique problems for the marketer. Language and currency are issues to deal with. Unpredictability generated by political whims can be a big negative. Volatility due to varied monetary and fiscal policies in these other countries can be difficult to predict and deal with. Tariffs must be overcome in some cases. Questions of who controls off-loading, warehousing and transportation will need to be answered. Shelf life becomes even more critical, so how you set up your domestic systems may require more thought. The customers establish what they want, and it’s very different from you.

Good markets for different products and specialty processing are factors on the plus side. Other cultures enjoy different tastes. They may react more intensely to issues such as GMO based product, offering opportunity to supply non-GM, organic or natural. Variety meats are well accepted in foreign countries but not the U.S., so you may find yourself looking to these outlets either directly or through an alliance to get the whole pig moved. When seeking value added, don’t overlook the minor items and simply capitulate those opportunities to someone else.

There are emerging markets close to home that may represent less challenging logistics for the niche marketer. The Caribbean and Dominican Republic are two examples of substantial markets for pork that are showing positive trends. The cruise ship industry has grown tremendously and offers a high-end market of its own to those who can offer something special in product or service.

Certainly, Canada and Mexico represent very large outlets for U.S. pork products and will continue to grow. As the huge Mexican population improves its income stream, diets will improve as well.

Relationships are key to all marketing. In the foreign arena this is doubly true. Work with people who know the territory and can help you interpret the culture and language. You will need a credible interface to quickly build trust. You need to be very responsive to the customer. As in all markets today, you have the equivalent of one shot at the deal and that situation renews itself every day.

Keep in mind several key points.
  • Foreign markets automatically demand a different product mix than our domestic markets. That offers great opportunity for market diversity.
  • Probability is high that foreign economies will run on cycles that don’t match those in the U.S., which is an advantage if you have some presence in both arenas.
  • Currency values can offer opportunity or a hurdle.
  • Politics are a wild card.
  • We are in a global economy so the market increasingly expects to do business across borders.
  • Digital technology can make this market possible for the smaller player.

The global economy creates new expectations of doing business across borders. It is more and more the norm. Thus, many governmental agencies and non-profit groups have expanded information services and human resources to help in these foreign markets. There are also programs that bring money to help your efforts. Some of the organizations that can assist you are discussed here.

Meat Export Federation
The U.S. Meat Export Federation (MEF) is a non-profit trade organization formed to identify and develop markets in foreign countries. MEF has become a central clearing-house of vital information for groups or companies seeking markets or looking to expand their presence into foreign markets.

MEF is unique in its private sector funding and governance. It is very much a cooperator with allied industry in its efforts and not strictly in production. There are offices in 13 foreign countries and representatives around the world. Cooperative projects in various countries are frequent and professional.

Information is available in a two tiered structure. Members have access to the full range of information but visitors can glean a great deal. Best access is through the Web site. Much of the information is generated or analyzed in-house by MEF staff. There are links to other industry and trade related Web sites. MEF also has offices in Tokyo, Osaka, Mexico City, Shanghai, Seoul, Moscow and Beirut.

Veritas Marketing is an MEF project that offers detailed data and analysis about a country or a region. This project started with Japan and is expanding to include as many trading partners as possible.

U.S. Meat Export Federation
U.S. Meat Export Federation, 1050 17th Street, Suite 2200
Denver, CO 80265
Phone: (303) 623-6328; Fax: (303) 623-0297
http://www.usmef.org/

Foreign Ag Service (FAS)/USDA
FAS is an agency of USDA that holds its mission to assist any and all qualified exporter candidates. FAS is a comprehensive service provider that offers data and analysis as well as specific programs for hands-on assistance to the exporting company.

Some Examples include:
The Facility Guarantee Program , which is designed to guarantee payments and improve exporter facilities in the target country. Such a program is aimed at reducing the physical constraints to trade in emerging markets or developing countries, such as unloading, warehousing, distribution, etc.

The Market Access Program (MAP) also uses Commodity Credit Corporation money to help U.S. producers and exporters finance promotional activity in foreign countries. This program is not only for market development. It includes market research, technical assistance and service after the sale.

The Supplier Credit Guarantee Program (SCGP) , CCC guarantees a portion of payments due from importers under short-term financing (up to 180 days) that exporters have extended directly to the importers for the purchase of U.S. agricultural commodities and products. These direct credits must be secured by promissory notes signed by the importers.

Two programs underwrite credit extended by the private banking sector in the United States (or, less commonly, by the U.S. exporter) to approved foreign banks using dollar-denominated, irrevocable letters of credit to pay for food and agricultural products sold to foreign buyers. The Export Credit Guarantee Program (GSM-102) covers credit terms up to three years. The Intermediate Export Credit Guarantee Program (GSM-103) covers longer credit terms up to 10 years.

FAS is an important stop for any company wishing to begin exporting. They have an extensive Web site at www.fas.usda.gov/. Additionally, the Midwest has a local outreach office.

Animal Plant Health Inspection Service (APHIS)/USDA
Although APHIS is thought of in the context of quarantine and inspection of imports, APHIS Veterinary service is available to work with exporters. The International Regulation Retrieval System in Fort Collins, CO, can be of great help. It lists animal health requirements of the other countries. Veterinary Service will work with an exporting company to meet the foreign country's requirements and issue certifications.

For permit applications and information about import/export requirements and user fees for animals, birds and animal products, contact:

USDA-APHIS-VS
USDA-APHIS-VS, National Center for Import/Export, 4700 River Road, Unit 40
Riverdale, MD 20737-1231
Phone: (301) 734-3294; Fax: (301) 734-6402
www.aphis.usda.gov/

Iowa Department of Economic Development (IDED)
Internationl Marketing Division Meat and LivestockPromotion Program
IDED’s International Marketing Division in conjunction with the state’s commodity groups, the U.S. Meat Export Federation and other contractors, can provide services to Iowa companies interested in exporting meat and livestock products.

Specific services offered to meat processors and others are:

  • Trade show information and coordination
  • In-store promotions during missions
  • Research into new markets
  • Match-maker appointments in various countries where missions are scheduled
  • Sponsored receptions in various countries
  • Trade shows and/or missions
  • Host buying missions

Buying Mission
Buyers from countries such as Japan, Korea, Mexico and China are brought to Iowa to meet with processors. IDED helps these buyers with their expenses and provides transportation while they are in the state. Iowa companies are contacted to determine their interest, and appointments are scheduled to help them access the buyers in the visiting delegations.

For more information about this program, contact:
Iowa Department of Economic Development
Iowa Department of Economic Development, International Marketing Division, Mark Fischer, Marketing Manager
Phone: (515) 242-4760; Fax: (515) 242-4918
E-mail: mark.fischer@ided.state.ia.us

Export Trade Assistance Program (ETAP)
Participation in international trade shows and trade missions is one of the most effective ways to enter into new international markets or expand visibility in existing markets. Trade shows offer the opportunity to meet potential buyers, test market interest and evaluate the competition. A trade mission can be a very efficient and cost effective means to meet potential distributors and buyers. Licensing agreements and joint ventures have also resulted from trade missions.
The State of Iowa offers financial assistance to Iowa companies who wish to take advantage of international trade shows and trade missions to enter new markets. Through ETAP, the International Marketing Division of the Iowa Department of Economic Development will reimburse 75 percent of a company’s eligible direct expenses up to $4,000 per pre-approved event.

Eligible expenditures may include:

  • Booth space rental
  • Booth construction at show site
  • Booth equipment and/or furniture rental
  • Booth utility costs
  • Freight costs of equipment and/or exhibit materials to and from show
  • Interpreter fees at show site
  • Participation fees for trade missions sponsored by the Iowa Department of Economic Development, the Iowa Department of Agriculture and Land Stewardship, the U.S. Department of Commerce or the U.S. Department of Agriculture
  • Per Diem (meals & lodging) for one employee for the duration of the event (rates calculated at 50 percent of the U.S. Department of State Standardized Regulations)

To be eligible to participate in ETAP, applicants must:

  • Employ fewer than 500 individuals.
  • Have at least 75 percent of employees employed within Iowa.
  • Exhibit products, services or samples of Iowa manufactured, processed or value added products or agricultural commodities in conjunction with a foreign trade show or trade mission.
  • Have at least one full-time employee or sales agent participate in the event.

Utilization of the ETAP funds is limited by the following:

  • Three events per state fiscal year
  • Participation in the same trade show not allowed in consecutive years
  • Participation in the same trade show a maximum of two times
  • One trade show in a specific country per state fiscal year

For more information, contact:
Iowa Department of Economic Development
Iowa Department of Economic Development, International Marketing Division, 200 East Grand Avenue
Des Moines, IA 50309 Phone: (515) 242-4760; Fax: (515) 242-4918
E-mail: mark.fischer@ided.state.ia.us
http://www.state.ia.us/international

Meat Export Research Center (MERC), Iowa State University
MERC was developed in 1984 to support the expansion of exports of U.S. meat and meat products and aid in the development of a stronger agricultural economy. As part of the Utilization Center for Agricultural Products, MERC is a multi-disciplinary center encompassing researchers in meat science, economics, sociology, microbiology, marketing, food science, transportation and logistics, and political science.

Research is conducted in the following areas:

  • Market identification and assessment
  • Product evaluation and product and process development
  • Demographics and cultural preferences
  • Trade barriers and public policy assessment

Newsletter
Information and technology developed in the center is transferred to meat processors, producers and exporters. A monthly newsletter, U.S. Meat Export Analysis and Trade News, is published in cooperation with the USDA/Agricultural Marketing Service, Livestock and Grain Market News, Des Moines, IA, and the U.S. Meat Export Federation, Denver, CO, providing timely price and trade information.

Short Courses
Conferences, seminars and workshops are held to address specific export issues. Consultations with individual companies address specific product issues. A variety of short courses designed to provide the latest information in processing technology are offered to commercial meat processors throughout the year.

Meat Laboratory
This state-of-the-art meat laboratory supports technology and product development. The lab has full processing capabilities starting with slaughter for poultry and red meats. Further processed meats, such as franks, luncheon meat and fermented products, also can be made. The lab is available to private companies for product and process development.

To request services, contact:
Meat Laboratory
Randy Petersohn, 194B Meat Laboratory, Iowa State University
Ames, IA 50011-3150
Phone: (515) 294-5321; Fax: (515) 294-6328
E-mail: randall@iastate.edu

Market Studies
New and expanding international markets for U.S. meat and meat products are evaluated. Researchers study and develop models of the livestock and meat industries of selected international markets. Models developed in these studies 1) determine relationships of price, demand and supply and 2) show possible changes in these relationships due to alternative public policies. Included in these studies are cultural characteristics that affect current and future demand as well as consumption of meat and meat products. Descriptions of marketing systems, distribution, transportation, demographics and political profiles affecting public policies are made.

Product and Process Development
Every international market has unique requirements and specifications for meat products. Identification of market needs leads to development of products that are potentially successful in specific markets. Researchers, using the extensive pilot plant facilities in the ISU Meat Lab and often in cooperation with meat product manufacturers, develop formulations and processes suited to products designed for specific international markets.

Value Added Utilization
MERC researchers strive to add value to beef and pork primal cuts by working with industry creating new or novel further processed products that fit foreign consumers’ tastes. Further processed meat products not only enhance the carcass value of the livestock by taking the product out of the commodity mode, but add to economic development as well.

Meat Safety and Meat Quality
The safety and quality of U.S. meats are critical determinants of U.S. export volumes. MERC researchers examine ways to reduce or eliminate pathogenic contamination, extend shelf life (Linear Accelerator Facility), find objective measures of quality and convey to foreign officials and foreign buyers the knowledge that U.S. meat is safe and wholesome.

Information and Technology Transfer
After gathering international market information and product technology, knowledge is transferred to processors, producers and exporters. MERC produces a newsletter, U.S. Meat Export Analysis and Trade News, and holds seminars, workshops and conferences to disseminate this information. The conferences and seminars provide a forum in which key people with expertise in international meat and meat product trade share information which will lead to expansion of meat and meat product exports.

For additional information, contact:
Meat Export Research Center
Meat Export Research Center, Sev Johnson
Phone: (515) 294-8899; Fax: (515) 296-6272
E-mail: sevjohns@iastate.edu
http://www.ag.iastate.edu/centers/merc/

Additional Assistance
National Pork Producers Council (NPPC)
This national producer organization spends much of its time on market place issues and offers great resources for the individual or company looking at foreign trade. NPPC’s Web site offers a gateway through links to appropriate agencies and resources. There is an extensive section at the site about niche marketing that includes foreign markets.

For further information, contact:
National Pork Producers Council (NPPC)
National Pork Producers Council (NPPC), P.O. Box 9114
Des Moines, IA 50306
Phone: (515) 223-2600; Fax: (515) 223-2646
http://www.porkboard.org/ or www.uspork.org/

Iowa Pork Producers Association
Iowa Pork Producers Association, 1636 NW 114th Street, PO Box 71009
Clive, IA 50325
Phone: (515) 225-7675 or (800) 372-7675; Fax: (515) 225-0563
http://www.iowapork.org/