Where's the beef? Not in Indonesia
WASHINGTON — When authorities discovered a case of mad-cow disease in California last year, Indonesia angered U.S. cattle producers by becoming the first nation to ban beef from the United States.
The fallout was immediate, and U.S. beef sales to Indonesia plummeted to nearly nothing.
Much to the satisfaction of cattle producers in states such as California and Texas, the government has decided to fight back: In the latest case to go before the World Trade Organization, the Obama administration is pressing Indonesia to open its markets and its estimated 240 million consumers to more American exports or face consequences.
“There's no scientific basis for turning away U.S. beef,” said John Harris, owner of Harris Ranch Beef Co., a family-run operation in California's Fresno County since the 1930s.
Kevin Kester, 57, a fifth-generation rancher from Parkfield, Calif., called Indonesia's action a “knee-jerk political action.”
And with U.S. beef exports accounting for nearly 13 percent of the industry's market last year, cattle producers say they rely on selling meat to foreigners to make a living.
Industry officials say that foreign markets have become particularly important for meat cuts that won't sell here. The Japanese, for example, have shown an affinity for cow tongue, helping drive up the value of U.S. beef sold to Japan by 19 percent in 2012. On Monday, U.S. Trade Representative Ron Kirk said the United States had reached a new agreement with Japan to remove some of the restrictions on selling beef, a move that he said would result in hundreds of millions of dollars of additional sales in coming years.
“We're not subsidized by the federal government at all — so we live and die by the marketplace,” said Kent Bacus, associate director of legislative affairs in Washington for the National Cattlemen's Beef Association, a trade group that represents 230,000 breeders, producers and feeders.
The stakes are high for the economy, with the beef industry supporting 1.4 million jobs, according to industry statistics. And in 2011, the 742,000 beef herds roaming the nation's pastures resulted in $44 billion of economic activity in the United States, the beef association said.
The Indonesian Embassy in Washington would not discuss the case but said in a statement that Indonesia “takes note” of the U.S. action and will respond in a timely manner.
“The government of Indonesia's aim is not to restrict imports, but to ensure that all imported goods are safe for consumption by consumers and safe for the environment,” said the statement, released by Ni Made Ayu Marthini, a commercial attache.
Along with rejecting American beef, Indonesia has upset other segments of the U.S. agriculture industry with regulations that make it harder to sell an array of products, including fresh fruits and vegetables, juices, flowers and dried fruits.
It's causing unease in Washington state, with Indonesia ranking among the top five importers of its prized Red Delicious apples and a $57 million market for cherries, pears and other fruit from the Pacific Northwest.
The push to gain more access to Indonesia comes amid hard times for the U.S. cattle industry, the world's largest supplier of beef.
Even in Texas, by far the largest beef-exporting state, there are signs of trouble.
Earlier this month, Minnesota-based Cargill said it would idle its beef processing plant in Plainview, Texas, throwing 2,000 people out of work, mainly because of a declining cattle supply caused by years of drought. In making the announcement, John Keating, president of the company's Cargill Beef division, based in Wichita, Kan., noted that the size of the U.S. cattle herd is now at its lowest point since 1952.
Overall, beef exports hit a high of $5.4 billion in 2011 and were expected to set another record in 2012.
But while the value of U.S. beef exports rose by 2 percent during the first 11 months of last year, the amount of beef sent to other countries declined by 11 percent, according to the U.S. Meat Export Federation.
And the amount of U.S. beef exports to Indonesia dropped by 91 percent from January through November 2012, compared with the same period in 2011.