Washington - U.S. meat groups want $400 million in new USDA export credit guarantees for South Korea all to themselves. In a letter to U.S. Agriculture Secretary Dan Glickman, the National Pork Producers Council and the National Cattlemen's Beef Association said USDA should designate the credits for meat purchases to help reduce a large U.S. surplus.
Glickman announced $400 million in additional credits for South Korea on Monday and said negotiations were continuing on the commodity mix of the package.
But while the allocations would include some commodities now suffering from low prices, the overall mix would "closely resemble" $1.0 billion in export credits that USDA has already allocated to South Korea, Glickman said.
Only $100 million, or 10 percent, of the initial $1 billion was allocated for meat purchases.
The largest amount, $350 million, went for corn and other animal feed, followed by smaller amounts for cotton, wheat, soybeans and hides and skins.
Altogether, USDA and South Korea are negotiating the commodity mix of $500 million in credits - the $400 million announced Monday and $100 million that has been on the books for South Korea since late December but never allocated.
USDA Undersecretary Gus Schumacher told reporters on Tuesday that USDA was "cognizant" of the meat industry's request, but no decision on an allocation had been made yet.
In their letter, the meat groups argue that "an export sale for beef, pork or poultry is as good as an export sale for U.S. feed grains" because the U.S. livestock industry is the biggest customer for U.S. feed grains.
Meat group representatives also argue that providing feed grain credits for South Korea would support the South Korean livestock industry at the expense of the U.S. industry.
"South Korea is shunning the allocation of GSM-102 for meat, while demanding even more export credit for feed grains," the meat groups wrote. "Further, the Korean government has targeted its pork sector for export development to Japan."
Glickman has called the GSM-102 export credit program the department's "big kahuna" for boosting U.S. farm exports.
Meat Industry Insights News Service
P.O. Box 553
Northport, NY 11768
Phone: 631-757-4010
Fax: 631-757-4060
E-mail: sflanagan@sprintmail.com
Web Site: http://www.spcnetwork.com/mii