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Elks: A Trade Trend Worth Noticing
By Stephanie Riddick and Sam Lee
Jethro, a l,100-pound bull elk, has a docile pet-like personality that has made him a favorite on Wild-N-Wooly Acres, Inc., a 600-elk ranch in Hopedale, Ohio, on the West Virginia Pennsylvania border.
This apple-munching giant is blissfully unaware that his annual horn growth makes him part of a powerful trade trend for U.S. agriculture. Nor does he know that the visitors he met in July were merchants in Hong Kong’s lucrative Chinese medicine trade preparing to make a $100,000 trial purchase of U.S. elk antler–a deal facilitated by FAS’ Agricultural Trade Office in Hong Kong.
Ancient Cure Turns Hot Commodity
Jethro’s owner, Pat Cooper, grossed $200,000 last year selling frozen bull-elk antler throughout Asia, where it is primarily used as a treatment for arthritis and traditional Chinese medicine.
As director of the American Elk Board, Cooper also represents other U.S. ranchers trying to reach the Asian market.
"It used to be that U.S. elk ranchers would sell all their antlers to Canada–and the Canadians would make deals in the Asian market," he said. "I felt it was high time to cut out the middle man."
FAS Makes Asia Accessible
Cooper has relied on Sam Lee, an agricultural marketing specialist with the FAS Agricultural Trade Office in Hong Kong. Lee made vital trade connections for him and the American Elk Products Board in Asia.
"When I go on a 2-week marketing trip alone, the first week is spent looking people up," said Cooper. "With Sam, we arrive and he knows exactly who we need to see and where they work. The appointments are already set up. He locates a translator for us to hire, but he can also bridge the language barriers himself. It’s too bad more U.S. companies don’t know what the ATO can do."
The Hong Kong trip was financed through the FAS Market Access Program. The Mid-America International Agri-Trade Council (MIATCO) obtained $79,000 in MAP money to finance the Elk Board’s trip to Hong Kong and to Korea and China. Cooper and other U.S. ranchers promoted their product samples throughout East Asia, increasing an awareness of U.S. antlers overseas.
"We went to an agricultural trade show in Seoul. The ATO there provided us with banners in Korean," said Cooper. "In the booth next to us a guy was trying to create consumer awareness for blueberry muffins. He had his work cut out for him. Blueberry muffins are a novelty food there. But everyone in Korea, whether they’re 8 or 80, knows what nogyong (elk antler) is and that it is used to treat arthritis and in other kinds of traditional Chinese medicine," said Cooper.
The rancher says that his total antler sales went up by 30 percent after working with MIATCO and FAS.
Hong Kong Comes Calling
It was in July of last year that Sam Lee helped organize a U.S. trip for Hong Kong’s major antler buyers.
Leung Hei Wun, a physician specializing in Chinese medicine research at Hong Kong Baptist University, accompanied the trade delegation to the Minnesota Velvet Competition.
Sales of traditional Chinese medicine and antler products in the past 2 years have fallen victim to Asia’s economic recession. Currently, the largest antler suppliers to Hong Kong are New Zealand, China and Russia.
The Hong Kong traders agreed that the trip to the United States had been very informative, and that U.S. elk antlers had great potential. Their main concern: the current drying process appears to reduce quality. They prefer that U.S. elk ranchers freeze their product, as Cooper does, so that they can perform the value adding drying process in Hong Kong.
During the trip, they agreed to a trial purchase of $110,000 in U.S. frozen antlers for evaluation in the Hong Kong market. Some of the Hong Kong traders had visited New Zealand farmers specializing in elk and red deer, a close relative. They said the industry is much larger and better developed in that country.
"The United States still has a long way to go to catch up, but I think my colleagues will agree with me when I say that the potential for the U.S. elk industry is great," said William Lo with Poyuen Medicine, Ltd. of Hong Kong.
In addition to the marketing expertise of the ATOs, FAS’ other program areas in Washington, D.C. are working to build U.S. antler trade in Asia. Both the Export Credits and the Commodity and Marketing programs are doing their share.
In 1999, elk antlers were put on a list
of commodities covered by the GSM-102 program. While not
available in Hong Kong, the program provides export credit
guarantees to facilitate overseas sales for Korea and other Asian
markets.
FAS’ Supplier Credit Guarantee Program, which also guarantees a portion of payments due from importers under short-term financing, covers farm-raised elk antlers as well.
The decision to add antlers to the commodities lists came in response to data showing ample antler opportunity in the Asian market.
The U.S. Elk Industry: A Snapshot
Asian medicine has long held that chemical components in elk antlers may help improve human joint structure and function. This implies that antlers may relieve the symptoms of arthritis–an assertion that has caused a surge in demand. Today’s scientific establishment is taking a second look at these venerable ideas. Thus, pharmaceutical companies in Asia and the United States have recently been on the lookout for new sources of elk antler.
The export of U.S. bone and antler products has racked up gains recently; total metric tonnage shipped overseas more than doubled between 1997 and 1998 to a value of $4.4 million.
There are approximately 1,400 breeders of farm-raised elk in the United States. The entire North American herd, including Canada, is estimated at 110,000.
Industry experts estimate that half of the U.S. antlers produced are sold to South Korea; the rest is sold to companies in the United States.
Currently, $30 to $40 per pound is considered a profitable price for antlers, but the prices have often dipped below this level since 1996.
Elk Genes: Another Money Maker
If Jethro were not oblivious to the subtleties of human language, he might be proud to hear that size and quality of his antlers have twice earned him the title of international champion–and that, to claim that title, he beat out elk in his age class from New Zealand and Canada.
He might also be surprised to hear that he has offspring in Canada. Frozen straws of his semen–and those of the farm’s other world champions, Apex and Platinum, earned Cooper $80,000 in the Canadian market alone last year.
In fact, Wild-N-Wooly Acres, Inc. has an on-site genetics lab to facilitate domestic and international siring.
"I am hoping we can use the Canadian protocols for animal genetics to ship semen to New Zealand and Korea next year," said Cooper. "Already, we have had requests from both countries."
Canada is protective of its overseas markets for elk genetics (semen and embryos). In fact, it’s been only 4 years since Canada opened its own domestic market to genetic products of U.S. elk. New Zealand and the United States comprise Canada’s primary market for elk genetics.
Elk Go South for New Markets
The U.S. Elk Board is also exploring opening markets in South America. In particular, Argentina and Brazil may provide opportunity not only in velvet, but also in meat and genetics.
Quality Antlers Only, Please
While the potential market for elk genetics is growing, the market for antlers is well established. Exporters should be aware, however, that antler quality requirements are stringent. For example, Korea will not import any antler products containing more than 35 percent ash.
The Ilk of Tomorrow’s Elk
As high-quality performers like Jethro continue to dominate international competitions, more countries may recognize the United States as a main player in the elk antler market.
If demand grows, there will be ample opportunity to catch up to producers in other countries like New Zealand.
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Sam Koon Yu Lee is with the Foreign Agricultural Service’s Agricultural Trade Office in St. John's Building, 18th Floor, 33 Garden Road, Central Hong Kong. Tel.: (011-852) 2841-2350; Fax.: (011-852) 2845-0943; E-mail: LeeS@fas.usda.gov Stephanie Riddick is an agricultural marketing specialist with FAS’ Commodity and Marketing Programs in its Dairy, Livestock and Poultry Division, in Washington, D.C. Tel.: (202) 720-7571; Fax.: (202) 720-0617 E-mail: RiddickS@fas.usda.gov
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