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USMEF: US beef thrives on the world market

by Wyoming Livestock Roundup

Casper – “U.S. prices remain strong. We had a counter-seasonal rally with the live cattle, and fat cattle are trading well over $1.20 a pound,” said U.S. Meat Export Federation (USMEF) economist Erin Borror. “Prices have moved back to record levels, and our exports are considered strong.”
    Borror spoke to producers at the 2011 Wyoming Stock Growers Association Winter Roundup on Dec. 14.
    USMEF operates offices in 13 countries around the world, working to develop marketing programs and clear U.S. meat products at the borders.
    “We are the global marketing arm and our core mission is to increase your bottom line,” Borror told producers. “We are in charge of the marketing and the issues that you face with beef, pork and lamb.”
    For U.S. beef marketing world-wide, Borror said, “We are always pushing the corn-fed aspect. We are still the unique producer of grain-fed beef.”
    “Through October, we are holding strong as the largest beef exporter through the world. We are beating Australia and Brazil – and that is a huge milestone,” commented Borror. “Brazil is down to number three, while our exports are up a strong 24 percent. In value, we set a new record, and we have exported $4.5 billion in U.S. beef through October.”
    She added that predictions expect end of the year exports to hit $5.35 billion, with volume exceeding 2003’s pre-BSE levels.
    Borror explained that Brazilian beef is number two in the world, and USDA forecasts estimate Brazilian production will increase by about three percent in the next year.
    She continued, “Brazil is actually consuming more beef at home because of their economic growth. In 2005 they had a large lower class, but by 2010, 90 million people moved into the upper and middle class, so per capita consumption is moving up.”
    “The majority of their production is grassfed, older cattle, and they haven’t been castrated, so it’s bull beef. We by far win on quality, but we are also competing with Brazil in nontraditional markets,” continued Borror.
    As trade relationships with countries around the world continue to improve, Borror highlighted Mexico, Canada, Japan, South Korea, Russia, the European Union (EU) and Middle East as having positive potential, but she noted ongoing obstacles with China.
    “We have new record levels with the exception of Mexico, as their economy has suffered with ours, and they have a weaker currency,” said Borror.
    Canada has been a record large market, noted Borror, because their cattle production is down about 10 percent. The country has shipped less beef and live cattle to the U.S.
    In Japan, exports have also recovered by 30 percent, despite the 20-month age restriction. Borror recognized that, while U.S. beef is recovering, markets have not reached the high levels seen prior to BSE in 2003.
    “It looks very exciting in Japan,” said Borror. “They are looking at revising their risk material definitions, so hopefully we will have that age restriction lifted to at least 30 months.”
    Also in Japan, Borror added that consumer confidence in U.S. beef is positive due to intensive marketing campaigns. Similar campaigns have hit the South Korean marketplace, with the “To Trust” campaign.
    “They are moving beyond the fear of U.S. beef, and now that they have tasted U.S. beef again we are moving into a second phase of marketing,” said Borror. “We are excited by the free trade agreement and hopefully tariffs will be reduced from 40 percent to zero over 15 years.”
    Russian accession into the World Trade Organization will provide an additional market increase as the tariffs over quota shipments will be reduced from 60 to 15 percent.
    “This year we had a doubling in the quota size, and our exports reflect that increase,” added Borror, noting that EU quotas are also expected to expand.
    “We have 20,000 metric tons of duty-free quota, and this quota is supposed to expand to 45,000 metric tons this summer, but there are a lot of other things going on,” said Borror.
    Europe has also approved other suppliers of beef and there are other challenges that need to be addressed. Regardless, Europe’s high income and lack of beef production provides the potential for an increase in exports.
    The high income in Middle Eastern countries also provides a market with plenty of challenges, according to Borror.
    “They don’t have the domestic production and their booming income is somewhat tied to U.S. dollars,” said Borror. “Beef exports are growing steadily and variety meats are very strong.”
    The U.S. is a top supplier of the region and is beginning to ship more muscle cuts, rather than only variety meats, such as liver.
    “We have been exporting value cuts for the last 35 years and have partnered with National Cattlemen’s Beef Association to try to increase the variety of cuts that we export,” she said
    Borror continued, explaining that previous consumers of variety meats, such as Egypt, have expanded their imports to include high quality choice cuts.
    “With the value cuts, we have been able to spread the dollars across the entire carcass to maximize the value,” commented Borror. “Exports have a lot to do with adding value to the chuck round and the short plate.”
    India’s markets are “an interesting case,” according to Borror. Because India is producing dairy products from water buffalo, they also have been exporting that protein product.
    “We don’t really think of India as a beef producer, but it a protein supply,” said Borror. “It is a lean product that is safe and affordable.”
    Perhaps one of the most challenging markets in the world is China, who still does not import U.S. beef.
    “The market in China is still closed,” said Borror. “China is a huge and exciting market with an incredibly low per capita consumption because they are constrained by the fact that they don’t have land.”
    Borror noted that China is unable to obtain a domestic supply of beef because of these constraints, and most of their beef comes from residual dairy.
    “The Chinese prefer grain-fed beef, but I’m not optimistic enough to give a timeline on when markets might open,” said Borror. “We have daily fights with China.”
    Overall, the exports market continues to increase and looks good for the future.
    “Next year exports get a little uncertain. We need to go through the revisions on the forecast still, but we are looking at maybe a three to six percent increase,” she said. “We are looking at a much smaller increase, but its hard to maintain 20 percent growth.”
    “We are excited about this coming year,” added Borror. “There are potential headwinds and local economic uncertainty, but there are many trade agreements that can be bullish.”
    Saige Albert is editor of the Wyoming Livestock Roundup. Send comments on this article to

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