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Denver, Colo. – When stepping back to take a look at the global meat market, Erin Daley of the U.S. Meat Export Federation (USMEF) says Brazil is down 15 percent in beef exports, while Argentina is up 55 percent.
She says Brazil has decreased in exports to its main market, Europe, because of their small number of licensed farms, which are required by that region. “Brazil has been surprisingly slow in response to Europe’s demand,” she notes.
“Argentina has had a massive increase in slaughter and low prices, which has made a huge increase in their exports – a lot of which go to Russia – but that’s not enough to offset the drop in exports from Brazil,” says Daley of the world market.
She notes Russia has undergone a big change, and was a “huge driver” in 2008 before the economic crash, importing meat in “unprecedented volumes.” In addition to Russia backing off in 2009, Daley says consumers in Mexico also backed off, trading down.
However, the growth side of the market is China and its region, including Hong Kong, Vietnam and Macau. In that region Daley says South American exports dominate, followed by India with cheap buffalo beef. Following those are the U.S., Australia and Canada. Although the U.S. has more export potential, China remains closed to its beef.
“There are ways of getting beef into the region right now, but it’s a huge growth market and we can’t overlook it going forward,” says Daley.
“World meat trade flows have been heavily shaped by market access, with South America not having access to high value Asian markets and the U.S. not having access to those Asian markets for fresh product,” she continues.
“Australia, New Zealand and Uruguay export over 60 percent of their meat production, and they also produce to meet the specifications and demands of the international marketplace,” says Daley.
Of the U.S., she says, “We supply 90 percent of our production to our domestic market. We’re by far the largest beef market and the highest per capita consumption.”
She says Japan, Korea and Russia rely heavily on imports, and that’s a trend that will continue as their domestic production isn’t efficient and on such a small scale it’s easier for them to import specific cuts from overseas.
Regarding the 2009 pork situation, Daley says the U.S. is the largest exporter of pork in the world, followed by Europe, Canada and Brazil. The “swine flu” scare caused a drop in all those markets except Brazil, which grew in 2008 driven by China and Russia.
“China consumes 50 percent of global pork,” says Daley. “They’re a growth market, but a wild card in what they’ll produce domestically.”
The U.S. meat export trend moving forward is generally positive, notes Daley. “Beef has not been able to regain its pace where we were exporting on a value basis more than pork or poultry pre-BSE,” she says. “That shows the impact of market access, especially in Japan and Korea, which were top markets on a value basis prior to BSE.”
Japan and Korea are major markets still not recovered to 2003 export volumes. “On a value basis, we’re at 94 percent of pre-BSE,” says Daley.
She says a few things that will help the U.S. are currencies, market access and consumer perspectives.
“We need to educate consumers on the production scheme in the U.S., and introduce them to the American cowboy. They need more familiarity with where their food comes from,” she explains. “The consumers, when they’re importing 50 to 60 percent of consumption, want to know where the meat comes from. We want to build more confidence in U.S. beef.”
Besides China’s growth potential, which is nearing the size of Canada on a volume basis, Daley says that while Japan limits imports to cattle less than 21 months of age there’s a billion dollars in potential left on the table.
On currencies, Daley says the Japanese yen has been strong. “Which has been frustrating with access for only under 21-month cattle because it was the one with the currency advantage the entire time,” she adds.
“Global beef consumption is expected to grow, by huge numbers especially toward 2050,” notes Daley. “It’s expected to grow by roughly the size of Europe’s current meat production by 2018. Hopefully we do have a little appetite for exports, because that’s where growth will occur.”
“Beef production has been stagnant, with the only growth expected in Brazil. We have tight global supplies, especially if we get into an expansionary phase and hold back heifers,” states Daley. “First we’ll need to see higher prices to have the incentive to expand.”
On another positive note for beef, Daley adds that poultry consumption has fallen after years of steady increase. “The U.S. poultry market is saturated, though a small rebound is expected in 2010,” she notes. “Poultry’s ability to quickly respond, as the most efficient protein, will be in their favor.”
Christy Hemken is managing editor of the Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

Casper – “As far as NCBA is concerned, a deal is a deal,” says Cottonwood, Ariz. rancher and National Cattlemen’s Beef Association (NCBA) President Andy Groseta of expanded beef exports to South Korea that were to be implemented May 15, but stymied in the wake of public protests in that country.
    “The agreement that was reached by our trade negotiators with the government of South Korea was fully compliant with OIE based on true science,” says Groseta noting the statement applies to beef from cattle of all ages, not just less than 30 months of age. “Now they’re coming back to us and part of their concern is whether beef is safe from cattle over 30 months of age.”
    In an effort to get commerce flowing Groseta says, “The five major U.S. beef packers have indicated they would be willing to label beef over 30 months of age and under 30 months of age to really ensure the Korean consumer U.S. beef is safe. Pre-BSE 2003 the majority of the beef we shipped to South Korea was from cattle under 30 months of age.” He also points out that Korean consumers pay more for their domestically raised beef that’s of lesser quality, than they do for U.S. beef.
    Confident the market with the potential to add $25 per head to cattle during a time when feeders are losing money will be regained Groseta says, “Once we can get back in the market place, I’m confident our export sales will surge. That market was an $815 million market pre-Dec. 2003. On today’s dollar that could easily be a $1 billion market.”
    Groseta says, “In today’s economic market, with feeders taking heavy losses, those losses are now going to be passed on to the cow-calf sector. For our industry to remain profitable, so I can stay in business, we need to grow the export market. Ninety-six percent of the world’s population lives outside the borders of the U.S. In order for us to be profitable in the business, we’ve got to grow our export markets around the world.”
    While Pacific Rim countries have become the focal point, Groseta says, “We’re sending a record amount of beef to a lot of countries worldwide. We’re shipping beef to 104 countries throughout the world and in 2007 we shipped a record amount of beef to 22 of those countries. In the first quarter of 2008 our beef exports worldwide are up 37 percent compared to first quarter last year.” The industry’s export market is more diversified than it was pre-BSE 2003. “We’re in a global marketplace and one billion people have moved from poverty to middle class in the last 10 years and they want to eat meat. We want to make sure at NCBA that U.S. beef is their protein of choice.”
    Some have expressed beliefs that the pending merger in the meatpacking and feeding sectors of the U.S. beef industry will help grow exports. “The one thing about JBS-Swift is that they have network established in the world marketplace. What they didn’t have in their portfolio was high-qualify beef and that’s U.S. beef,” says Groseta.
    NCBA, says Groseta, is concerned about consolidation in the industry and carefully monitoring the Justice Department’s investigation. “If anybody has any concerns they need to contact our staff in D.C. and we can put them in contact with the Justice Department.”
    Also relating to feeder profitability Groseta says when it comes to ethanol the U.S. government has gone off course. “We’re all for renewable fuels, but what has happened is we don’t have a level playing field. By mandate from our government they’ve created winners and losers. The winners are the people who grow corn and the losers are really all of the livestock industry, not only the cattle industry but poultry industry and the hog industry.” Groseta says cattlemen can adjust to the marketplace, but the government mandates makes if difficult to compete.
    Recently traveling in Nebraska, Groseta says he’s told the cattle feeding industry there is losing $15 million a week. “We’re losing $150 million a week nationwide in our cattle feeding industry. This industry cannot sustain those kinds of losses.” Losing $150 to $200 per head, Groseta says Texas leaders have asked the government to reduce the 2008 mandate for ethanol usage in this country by half. The public has until June 23 to submit comments to the Environmental Protection Agency on the proposal. “There has to be some relief,” says Groseta noting escalating prices from feed to fuel. He says the requirements are also pushing the demand for corn beyond the cultivated acres available for production.
    Like others around the nation, NCBA is anxiously awaiting the U.S. Department of Agriculture’s rules relating to Country of Origin Labeling. Passed as part of the recently approved farm bill, the program is to be launched September of this year. Groseta says USDA is now in a “time crunch” to get the rules written. A “grandfather date” included in the farm bill says all cattle in the U.S. prior to July 15 will be considered as “U.S. origin” for purposes of COOL.
    “NCBA did work on some things to make it easier on the producer,” says Groseta of language in the legislation. “We’re waiting for USDA to write that,” he says of a subject he is often asked about by the nation’s producers who want to know what guidelines they’re going to need to meet beginning with the calf crop many will market in the months to come.
    With so many opportunities and challenges facing the industry, Groseta says, “We need to engage our own people and they need to be proactive. At the NCBA we have 31,500 members and there are 750,000 beef producers nationwide. We have to activate our people.” With fewer people involved in American agriculture today Groseta says, “We cannot afford to be fragmented. We need to stand united and speak with one voice. Our political clout, whether it’s in your state capitol or Washington, D.C., it’s getting weaker and weaker all the time.”
    NCBA President Andy Groseta was in attendance at the Wyoming Stock Growers Association convention in Casper early June. Jennifer Womack is managing editor of the Roundup.

Fort Collins, Colo. – In July 2013, the U.S.-China Agriculture and Food Partnership (AFP) was established to coordinate between private and public sectors in the United States and China and to serve as a platform for dialogue and discussion about food and agricultural issues facing both countries.

Bill Westman, senior vice president of the North American Meat Institute (NAMI), remarks, “Our role in the policy is to facilitate opening markets to promote trade in meat and poultry products.”

Trade is the operative word, he adds, explaining that exports are only part of the equation.

Ag partnership

“The AFP revolves around three themes – food safety, food security and sustainability. That is important because China is an excellent market for us for many products, but it’s still closed to the U.S. for beef. We are working with the governments to resolve the issues so we can officially send U.S. beef into China,” Westman explains.

The partnership is led by the private sector and includes the participation of many individual businesses and other organizations.

“We work with as many trade associations and meat culture groups as we can to come together and coordinate policy with government. We have a beef market access group with the U.S. Meat Export Federation (USMEF) and the National Cattlemen’s Beef Association, and we talk every week,” he says.

Similar efforts are also being made for pork, and NAMI has a food and agricultural export alliance to bring in dairies, soybeans and grains, as well. There is also some cooperation with poultry, although that industry faces additional challenges and tackles many issues through other organizations.

Strong markets

“We feel we can make a lot more progress on the beef issue if we work cooperatively with private sector there,” Westman notes. “China is an excellent market, but we feel we can work with them on many issues related to food safety and how to improve their operations. It’s like any developing market. Strong markets become good customers.”

Strong meat markets in China also create opportunities for related businesses, such as equipment manufacturers, processing and packaging plants, food safety businesses and more.

“We want to be able to compete fairly in the market because we think we can do very well there. We also get a lot of support from China because they understand that, as their system improves, they will also buy from us to supply a growing market. It’s a win-win situation,” Westman states.

Cooperation

To show that the benefits can be big for both countries, NAMI and AFP have been working with interested stakeholders to discuss concerns and issues in the market.

“We have to develop a relationship, and we have to show up. We’ve been doing that for the last five or six years by, for example, going to their shows, and it’s been only in the last year to year and a half that China has recognized that we’re there to work with them and we want what they want,” Westman continues.

One example of current efforts include conversations with China Agriculture University. The university is looking to train students in Beijing and then send them to the United States to learn more about how information is shared and how products are improved.

“It’s a really interesting project, and what’s more interesting is that they came to us about it – they asked for help,” he comments.

NAMI is also creating a Meat Buyer’s Guide for the Chinese market, with the language translated into both traditional and simplified Chinese characters.

“We are not planning to change the pictures or cut nomenclature or coding, but the China Meat Association has asked us to do this so they can better utilize the book when ordering and learning about what types of cuts are available,” he remarks.

Product demand

Demand is high for offal overseas, which benefits American meat suppliers who don’t have a strong market for those items. If the Chinese could order those products from the United States, it could provide an advantage to both countries.

“They are already buying these items from other countries, so why couldn’t we get some of the business?” Westman asks. “We feel that we have the best system, the best products and the best genetics in the world.”

“The government officials in China say they are going to import beef to meet their domestic requirements, and we think, over the long term, it will be a very good market. We want to be able to compete,” he explains.

Common interests

Westman also believes that there are misconceptions about food safety in China. After living there, shopping at the supermarkets, preparing meals at home eating in restaurants and speaking with ag and food industry representatives, he expresses similarities between the cultures.

“They want safe food. They want a stable food supply. They want a good future for their children,” he says.

Westman hopes that the AFP collaboration will bring common interests to light, so trade can operate successfully in the global marketplace, benefiting everyone.

“We are two of the most important countries in the world in producing agricultural products. We should be working together. That’s what this is all about,” he states.

Bill Westman spoke at the International Livestock Forum in Fort Collins, Colo. in early  January.

Natasha Wheeler is editor of the Wyoming Livestock Roundup and can be contacted at This email address is being protected from spambots. You need JavaScript enabled to view it..

Casper – Wyoming’s Attorney General has joined the U.S. Department of Justice and 12 other state attorneys general in filing a suit to block the merger of National Beef Company and JBS S.A.
    In March 2008, JBS S.A. announced plans to buy National Beef Co. and Smithfield Beef Group. This would merge three of the five packing companies controlling the U.S. beef market. Remaining national competition would be between JBS, Tyson Foods and Cargill Inc. Under the proposed merger, JBS would become the largest meat packer and the largest cattle feeder in the world. Their assets would include beef and lamb plants in Greeley, Colo. and other packinghouses that routinely buy cattle and sheep from Wyoming.
    “Competition must remain in the meat packing business in order for Wyoming ranchers to receive a fair price for their animals,” said U.S. Senator Mike Enzi of the news. “I am pleased the DOJ scrutinized this merger closely because a competitive market is vital to the success of Wyoming ranchers.”
    “The Department of Justice heeded our warning. Competitiveness in this sector is vitally important to beef and lamb producers across the country, especially here in Wyoming. It’s simply bad economics for one or two corporations to control any market, especially the livestock market. A bad merger would negatively impact everyone from the ranch to the grocery store aisle,” Senator Barrasso said.
    Wheatland cattle feeder and Organization for Competitive Markets Chairman Randy Stevenson agreed, but said DOJ’s actions don’t go far enough. He said OCM along with R-CALF USA will ask the attorneys general to expand their litigation to include JBS S.A.’s acquisition of Smithfield’s Five Rivers Feedlot, the nation’s largest feedlot. Noting further vertical integration he believes will occur from JBS’s acquisition of Five Rivers, he said, “We still have our work cut out for us.”
    “We’re happy the Smithfield deal went through,” said Chandler Keys of JBS S.A. during an Oct. 22 interview with the Roundup. He said the Smithfield purchase would be closed within the week.
    “We’re disappointed the DOJ is going to try and block us on the National purchase,” said Keys. “We’re committed to pushing this acquisition through. We have other avenues and will begin pursuing those.”
    “We are disappointed that the DOJ does not recognize that this transaction is pro competitive and we plan to vigorously contest the DOJ’s attempt to block it,” said Steve Hunt, Chief Executive Officer of USPB.
    John R. Miller, CEO of National Beef, added that, “this transaction will bring tremendous value to our customers and other stakeholders through cost savings and other efficiencies as well as increase the depth and reach of our industry-leading programs that deliver better value to both cattle producers and beef consumers. We will not allow our disappointment with the DOJ’s action to distract us from our continued focus on serving the needs of our customers.”
    “As JBS has increased its ownership in the packing and cattle feeding industries, NCBA has supported DOJ’s efforts to monitor, evaluate, and—if necessary—act upon these acquisitions. We encourage the process of due diligence and will be closely monitoring this case and the impacts on the beef industry,” said National Cattlemen’s Beef Association President Andy Groseta in response to DOJ’s case. “In particular, we will be making certain that the prices cattle producers receive for their animals do not decrease unfairly. NCBA supports free and fair competition in open markets, and believes this is the best way for cattle producers to remain profitable while providing consumers with high-quality beef.”
     “We believe the DOJ and state attorneys general have an extremely strong case and we are extremely pleased that they have taken action to protect the competitiveness of the U.S. cattle industry,” said R-CALF USA President/Region VI Director Max Thornsberry.
     “Apparently, the Justice Department’s merger investigation found that the most severe antitrust and anticompetitive problems stemmed from the proposed purchase of the 4th largest meatpacker and not the 5th largest meatpacker, but it’s too early to determine what overall affect this will have on the plans of JBS,” Thornsberry said.
    On March 4, 2008 USPB and National Beef announced an agreement under which JBS S.A. would acquire all of the outstanding membership interests of National Beef for US$560 million plus the assumption of all of National Beef’s debt and other liabilities at closing. As previously announced, USBP producer members overwhelmingly voted to approve the transaction on March 14, 2008.
    Consummation of the transaction remains subject to resolving this matter with the DOJ. Premium Beef, LLC is the majority owner of National Beef Packing Company, LLC.
    Jennifer Womack is managing editor of the Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..
Denver, Colo. – With discussions focusing on the ability of agriculture to feed the world over the next 40 years, information is readily available about the technology that will be needed to meet consumption demands, but Senior Director of the Knowledge Exchange Division at CoBank Terry Barr questioned the economic impact of such demands.
    “This industry has always had to deal with volatility in feed costs, and we introduce a lot more volatility with exports, regulatory requirements and food safety,” he mentioned in the opening session of the National Institute for Animal Agriculture Conference on March 27. “It is beginning to squeeze the industry.”
    “We will have to reshape the livestock industry going forward,” said Barr. “I am less concerned about the capacity to do it and more concerned about the structure of the industry.”
The driver
    “We will add 3 billion people over 40 years, and most of that will occur in Asia and Africa,” Barr said, adding that Asia has the fastest growing middle class, while African populations see the highest incidence of inability to provide food to its people.
    A 42 percent global population increase means that agriculture will be responsible for providing a 49 percent increase in cereal production and 85 percent increase in meat production above 2005 levels, according to Barr.
    “If we look at only developing countries, the increase in population is about 54 percent. Their cereal production must go up 61 percent and meat must go up 132 percent,” Barr said. “If they are able to do that, they will rely on imported meat.”
    In these developing countries, Barr noted a dramatic movement into the middle class will result in the higher meat demands.
    “We will see 2 to 3 billion people enter the middle class, and almost all of that shift will be in Asia,” he said. “When people get into the middle class, they begin to demand a different diet.”
    Barr added, “Beef consumption grows most rapidly as people enter and pass through the middle class. We will have to increase beef production by 73 percent in the next 40 years to satisfy that demand.”
    “There is a fairly lengthy list of constraints,” commented Barr, listing land availability, water supply, technology, climate, energy, food waste and loss, food safety and government policy as a few.
    Addressing these constraints before they become widespread problems will be important, as well.
A look at natural resources
    As has been echoed by others, Barr marked water as a resource of growing importance.
    “Water will probably be the most strategic resource going forward,” Barr said.
    He noted that, also assuming no gains in efficiency, we will see a 40 percent gap between the available water and water needed, and to accommodate shortening supplies, Barr said yield increases in agriculture will be necessary. Yield increases also are important in addressing concerns of land availability.
    “The amount of land area that we can increase is on the order of 10 to 15 percent – not much,” said Barr. “Asian economies are trying to develop food security on the basis of long-term land leases.”
    These leases guarantee land will be available for food production in the future, largely since the areas expecting the largest population growth already see strained land availability.
    Climate change, noted Barr, is the wildcard when looking at resources and changes in the industry.
    “The reality is that if temperatures increase, that will put more strain on technology and the availability and use of acreage,” said Barr.
Energy consumption
    “Energy will be the other wildcard,” commented Barr. “World energy consumption will continue to increase dramatically.”
    He noted that increases will be seen most quickly outside advanced economies and, while liquid fuels will continue to be an energy source, natural gas and renewable energy will become increasingly important.
    “When we ask analysts to do long range forecasts on oil, the answers they give range anywhere from $100 to $300 per barrel,” explained Barr. “That really isn’t very helpful in guessing where the industry is going, and it adds volatility.”
The food source
    “Food safety is an issue that will have to come back to focus on sound science, and more of the industry will have to spend more time on that,” Barr commented, noting that pressures are domestic and international.
    China and South Korea, for instance, are seeking more assurance about the safety of food, and Barr said agriculture will have to get better in responding to challenges and appealing to sound science.    
    He added that more than 20 percent of food produced was wasted or lost, which is cause for concern. Particularly in developed countries, waste is prevalent.
    “When we look at the global economy today, it is not being driven by the advanced economies, but by the emerging markets. We will continue to see this trend,” explained Barr. “We have a lot of challenges going forward.”
    “Can we feed 9 billion people? When I look at the number and the potential with regard to efficiencies and technology, the answer is yes,” Barr stated. “The question is what is the level or the relative prices for inputs that will be on the table?”
    Saige Albert is editor of the Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..