Export markets increase opportunity, add value to U.S. beef cattle industry
Laramie – As the world population begins to move away from poverty into the middle class, people are beginning to seek more protein in their diets, and the result, said Greg Hanes of the U.S. Meat Export Federation (USMEF), is increased opportunity for the beef industry.
“As economies develop, they move toward more protein and different types of protein,” Hanes explained in his presentation at the 2013 AgriFuture Conference in Laramie on Oct. 8-10.
While beef is still the least-consumed protein in the world, the industry is seeing steady growth.
Though beef supply in the U.S. will likely be down for 2013, Hanes noted that world supplies are consistent, even increasing slightly.
“Globally, we are expecting beef production to be about level, and even a little up,” he explained. “North America will be down, mainly because of the drought. Our other competitors, such as Australia, South America and are all up.”
An additional advantage for U.S. beef producers is that the product is grain fed. Most beef in the world is grass fed, allowing less competition.
“Our production is down, so our prices will be higher and less will be available,” said Hanes. “Despite that, I think we will still be competitive.”
Worldwide, Hanes said that the U.S. has always been a leading beef exporter.
“The four big exporters are the U.S., Australia, India and Brazil,” noted Hanes.
However, India exports water buffalo as “beef.”
“The product is very, very cheap and goes into the Middle East, southeast Asia, Russia and China,” he explained. “Even though it isn’t beef, it is a good gateway product.”
As a gateway product, Hanes said the product from India gives consumers an introduction to beef at a more affordable price and will eventually lead consumers to higher quality products, like U.S. beef.
“India helps to set the stage and gets consumers introduced to beef, even though it isn’t real beef,” he noted.
Around the globe, China is the biggest importer in the world.
“From this year to last year, the growth of Chinese imports of beef was tremendous,” he explained. “They almost doubled their imports.”
While China’s consumption is good news for the world beef industry, it provides frustration for U.S. producers.
“The U.S. doesn’t have access to China,” Hanes said. “We can’t export our beef to China because of mad cow disease concerns.”
However, he also noted that the decision to not allow U.S. beef is also political, as the U.S. don’t import frozen Chinese poultry products.
Recent developments in agreement with Chinese poultry may open markets in the near future.
Despite lack of access to China, recent increases in market export ability to Japan has been largely helpful.
“In some ways, lack of access to China might be good, because we have a change in access and demand has really increased in Japan,” said Hanes. “Access to Japan and China at the same time would be tough for consumers because it would mean a bigger price jump for domestic beef consumers.”
Additionally, he noted that U.S. beef is still available in China, as it is frequently smuggled into the country through a variety of different channels.
“The demand for U.S. beef in China is crazy,” he commented. “If we had access, the market would take off.”
Canada and Mexico also both provide major markets for U.S. beef as a result of the North American Free Trade Agreement (NAFTA).
“Right now, the U.S. is exporting 12 to 13 percent of our total production,” Hanes said.
While the U.S. has the ability to export higher value products like steaks, it also finds significant value is exporting offal products.
“In the U.S., we don’t have a whole lot of demand for variety meats,” Hanes explained. “We are sending more than 90 percent of livers, hearts, kidneys and tongues overseas because emerging countries like it.”
The result is increased profit for American beef producers.
“We are able to export these products at a good price,” he said. “For example, in the U.S., tongues might bring $1.50 per pound. In Asia, we can get $6.50 a pound.”
USMEF data showed that exporting offal and variety meats adds approximately $272.90 in additional value to each animal that is sold.
“For producers raising cattle, that $272 can be the difference between being in the black and being in the red,” he commented.
At the same time that the U.S. exports large amounts of beef, we also import significant qualities of the product.
“The second largest importer in the world is the U.S.,” explained Hanes. “Most people don’t realize that. The product we are bringing in is mainly trimmings and low-quality product from Australia that is mixed with grain fed beef to make hamburger patties for McDonald’s and Burger King.”
Because the U.S. is able to import low quality product very cheaply, it also has the ability to realize more profit and bring more value to consumers by providing higher quality cuts, such as steaks, for export.
“Exports provide a lot of opportunity for U.S. beef producers,” noted Hanes, “and opportunities are changing every day.”
Saige Albert is managing editor of the Wyoming Livestock Roundup and can be reached at firstname.lastname@example.org
Pork and poultry make up the majority of protein consumed in the world.
“Poultry is the cheapest source of protein for most countries,” Greg Hanes of the U.S. Meat Export Federation said. “Pork is growing steadily as well.”
Around the world, China is the leading pork producer.
However, the country is seeing little expansion of the industry as a result of environmental and food safety issues.
“China has had problems selling rat meat as beef and pork,” explained Hanes. “Consumers are raising concern about domestic production, so they are looking for safe products elsewhere. Chinese consumers are looking to the U.S. beef and pork industries to supply their protein.”