Current Edition

current edition

Beef

Torrington – Wyoming beef producers learn exporting their beef overseas is currently in its infancy, but it could prove to be a big market for them in the future. 

Andrew Carpenter, the international trade manager for the Wyoming Business Council, told cattle ranchers during the recent Southeast Wyoming Beef Production Convention, the number of Wyoming producers who want to export beef is limited, but it will grow in the future as more infrastructure is put in place.

The state is looking to increase its exports, particularly for beef. Wyoming is currently ranked 14th overall in beef production, but it is 49th, only ahead of Hawaii, in total exports. 

While exploring export opportunities for the state, Carpenter said that Taiwan quickly popped to the top of the list because of its growing economy, and interest in purchasing more proteins, especially red meat. 

Opportunity

“In Taiwan, Wyoming has a lot of opportunity for agricultural exports,” Carpenter told producers. 

Taiwan is the 10th largest goods trading partner in the U.S., the 14th largest market for exports and seventh in agricultural exports. Taiwan has a growing population exceeding 23 million and very limited ag production. 

“They are looking for American products,” Carpenter said.

The international trade manager sees Wyoming beef becoming a popular commodity in the country. In October, the Wyoming Business Council was involved in shipping beef to Taiwan for a government reception in Taipei. The shipment consisted of ribs and loins to serve about 120 people. 

The country was pleased with the product and has requested more Wyoming beef to be shipped by air. 

“They sell premium beef at steakhouses for over $100 a plate,” Carpenter told producers. “That could be a lot of additional value for Wyoming producers.”

First steps

However, an infrastructure needs to be established before Wyoming producers can become consistent trading partners. 

First, cattlemen would have to be willing to sell beef into international markets, taking on additional risk and putting more effort into moving up the value chain. 

“By selling into Europe, Asian and Pacific markets, there is added traceability and hormone-free and other export requirements producers need to manage for,” Carpenter explained. 

Producers will also need to work together to establish these marketing channels and find solutions to the challenges they face. 

Market development

One of those challenges is market development. 

“Wyoming beef is like any other business, and we have to work together as producers to accomplish our goals. Exporting beef takes a lot of marketing skills. Figuring out the rules of exporting is very complex,” he stated.

But help is available. As part of his job with the Wyoming Business Council, Carpenter is responsible for managing a federal STEP (State Trade and Export Promotion) grant, which provides financial assistance to Wyoming companies looking to export their products. 

“Producers are welcome to see what opportunities are there,” he said.

The Wyoming Business Council also recently joined the U.S. Meat Export Federation program, which promotes American-produced beef throughout the world. 

“They have a strong presence in the Asian-Pacific market, and we will work with them to help promote our product. In the past, they haven’t done state-specific programming, but in this instance, they will probably work with us to promote Wyoming beef and bring some of that value back home to our producers,” he said. 

Key piece

Wyoming is known for the quality of feeder cattle it produces, but about 90,000 head of cattle are finished in the state each year. If an export market is established, that could increase 20 to 30 percent. 

The feed is available but not a marketing incentive, so the extra feed is shipped out of state. 

The key is establishing a USDA-inspected beef processing facility within the state that is willing to work with producers who want to export their beef. Currently, only two USDA-inspected facilities exist in Wyoming, and both primarily target local and regional markets. 

“Finding someone with the capacity and scale to meet the demand is going to take some time,” Carpenter said. “We have to be able to deliver a consistent product, with consistent timing, with more outlets, more restaurants and greater markets.” 

Ranchers who sell beef at a retail level currently have to take the cattle out of state for processing, one rancher pointed out. If large packing facilities like JBS process the cattle and export the beef, they will be the ones to garner most of the premium, he said.

Benefits

Carpenter admitted the people who will benefit first from exporting beef are those who hold cattle and sell them directly to packing facilities like JBS. 

“There are a lot of feedlots around here who buy feeders and grow them out to fat cattle or retain ownership of them through the finishing stage. They will be the first ones to benefit,” he explained. 

The state also needs to work on marketing and building a Wyoming beef brand with more producers. 

“There are a lot of different opinions on what a Wyoming state beef brand should look like and the criteria it’s built around. There is also the question of who owns it and verifies it,” he said. 

Improvements

A lot of infrastructure will be needed to make exporting a reality. 

“The best optimal scenario is to get a working scenario. We may have cattle that are born, raised and fed to finish in Wyoming, then hauled to Colorado for slaughter. It is not essential that they are killed here in Wyoming, but traceability is key because that’s where the premiums come in,” Carpenter said. 

“Our goal is to raise a consistent supply of what countries like Taiwan are looking for – prime beef. What we have are specific things that brand us. They like our Wyoming beef, its flavor, the traceability, open spaces and the cowboy theme we can provide here,” Carpenter explained. “It is a great opportunity, and the challenge for us is to brand and sell beef so there is a premium for our Wyoming producers.”

Gayle Smith is a correspondent for the Wyoming Livestock Roundup. Send comments on this article to This email address is being protected from spambots. You need JavaScript enabled to view it..

Denver, Colo. – The big decrease in the meat expenditure index from 2008 to 2009 will continue into 2010, according to European consultant Richard Brown.
Brown was present to speak at the 2010 International Livestock Congress during the National Western Stock Show in Denver, Colo.
“In 2009 the price reaction came down more than we were expecting, because the economy was worse than we were expecting, except for China,” noted Brown.
He explained China’s prices stayed high because of a Porcine Reproductive & Respiratory Syndrome (PRRS) epidemic in the country’s pork industry that reduced production by 3.5 million tons in 2009.
“The Chinese government didn’t turn to the world markets, saying they had a problem and importing more to have meat available for their people,” said Brown. “Instead, their purchases were strategic and lifted the pig price, which caused Chinese pig farms to make a serious effort to produce more meat.”
“The place where a quarter of the world’s meat is consumed does not have a huge bearing on world trade,” said Brown. “China does not import much meat at all.”
Brown noted that the Middle East and Africa are complicated regions, but “massively important vacuums” for importing meat, including chicken, sheep and beef.
“Those regions are very important for the future because they’re very likely to import an ever-increasing quantity of meat, and exporters need to have a better understanding of how that market works,” commented Brown.
Although Russia can be “huge” for importing meat, Brown said that country has an “erratic total import volume.”
“The long-term trend expectation for importation to Russia is down for pork and poultry, but less so for beef,” explained Brown. “It’s clear the Russians don’t have a vital beef industry, and not much capital into increasing beef production. It’s likely the volumes of beef imported will be considerable for quite some time, and the prices will be interesting to all of us.”
“China will be the big question mark for the long term,” said Brown.
Of the worldwide cattle herd, which takes a long time to build up, Brown said everyone around the world has been surprised the U.S. cattle herd has not seen the expected upturn.
“Not surprisingly, production is down and thank heavens for that,” said Brown. “If it hadn’t been down we’d face much lower prices than we’ve had in the last year. It’s a fortunate coincidence as far as cattle farmers are concerned.”
“The U.S. is the largest producer of beef in the world, and its trend is down for 2009 and 2010. Brazil is not down, with a big change there in the last couple years,” noted Brown.
Regarding worldwide markets, Brown emphasized it’s “not one big homogenous cattle industry.”
“Different types of cattle are needed in different parts of the world, at different costs and different conditions,” he added. “There are significant differences in the preference of beef people like to eat. Producers need to be extremely careful to understand the different national cultures in beef.”
Because of that, it’s not easy to make meaningful production cost comparisons across countries. “If you look at Germany, France, Italy and the U.K., their cost of production is much higher than Poland’s, and the U.S. has a lower cost than all of Europe, and South America is much lower than the U.S.,” said Brown.
“Absolutely you’re not comparing like to like and one shouldn’t regard beef as a homogenous commodity and there are opportunities to market in different places in different ways. It’s an interesting, segmented beef market,” he added.
Looking ahead, Brown said a “very significant” decrease in volumes exported by Brazil is expected.
“They have not responded to traceability, and it’s taking Brazilian farmers a very long time to respond to what the politicians require, and the retailers,” he explained. “It’s incredible how the thinking has changed over a two- or three-year period of time. Now there are supermarket chains with absolutely no interest in South American beef whatsoever. They’re extremely sensitive to the issue of sustainability and everything that goes with that. It’s a very complicated subject.”
“There are whole loads of factors that are changing, including the supply chain, regulations and protectionism, cost of production, profitably, sustainability and climate change,” said Brown. “Producers will need to reflect carefully upon them in forming long term strategies. It’s a time for the meat industry and farmers to be very cautious, understanding the market before we pour too much capital into developing our businesses on historic assumptions.”
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..

“We’ve been in an expansion phase since 2015, and we have more cattle coming to us,” CattleFax Analyst Troy Bockelmann said during a Jan. 23 Trend+ Webinar, sponsored by CattleFax and Elanco Animal Health. 

Bockelmann looked at data suggesting that cowherd numbers are still rising but at a slower rate than over the last five years.

Prices for beef producers will be supported by continued increases in export levels and a drop in imports, he said.

Inventory

2014 marked a low in the beef cattle industry, and in the last five years, the herd increased by 3 million head. 

“A lot of that increase came in 2018. We see a slowdown in the expansion rate,” said Bockelmann. “In January 2019, we see the beef cow inventory up 180,000 and another increase in 2020 of 100,000 head.” 

Looking two to three years into the future, he expects the expansion will continue to slow as the industry tops out around the 32-million-head mark. 

With more cows in the herd, the calf crop also saw an increase of one percent in 2019. 

“Just as the beef cow inventory increase is moderating, we see a decrease of acceleration in the calf crop, as well,” Bockelmann commented. “We’re expecting a 0.6 percent increase in 2019 and a 0.3 percent increase in 2020.”

He added, “While we see a decrease in the expansion rate, there are still quite a few supplies in the calf crop.” 

Fed slaughter

Fed slaughter numbers will reflect a similar trend. 

“Because we see a 300,000 head increase in fed slaughter in 2019, much of the increase will have to happen in the first four months of the year when we have available harvest capacity,” Bockelmann explained.

However, harsh winter weather will push fed slaughter back, which might mean more level slaughter numbers through the second half of the year, he added. 

“While we can see prices supported in the early part of the year, as we build front-end supply and push cattle back, we might add more risk into the second half of the year,” Bockelmann said.

Import, export impact

The export market will continue to support the cattle industry as well, Bockelmann said, recognizing that growth has continued since markets reopened following 2003’s bovine spongiform encephalopathy (BSE) scare. 

“In 2016, 2017 and 2018, we saw growth rates above 10 percent,” he explained. “As we look over time, we have a few years of growth followed by a pullback. In 2019, we see about a six percent growth in exports in 2019.”

Asian markets continue to demand U.S. beef strongly. In particular, South Korea beef exports grew 40 percent last year, and Japanese exports increased eight to 10 percent. 

“We also see strong beef exports to Mexico. Demand is weaker from Canada, but all in all, we’re continuing to see growth in beef exports,” Bockelmann said. “Growth is slower, however, than we’ve seen in the recent past.” 

Imports have been relatively steady over the last three years. 

Australia’s cattle industry was stricken by drought in 2014-15. Though they started to rebuild in 2016-17, another harsh drought led to a nine percent jump in cattle slaughter in 2018. 

“We expect beef production to be down about six percent,” Bockelmann said. “As a result, imports to the U.S. will slow down, and demand in Mexico reduces the amount of beef Mexico exports to the U.S.” 

Bottom line

“The bottom line is, when we come down to it, a 300,000 head increase in slaughter, six percent increase in beef exports and overall four percent decrease in beef imports, per capita supplies are going to be relatively flat in 2019,” Bockelmann emphasized. 

A threat of either U.S. or global recession in 2019 and 2020, coupled with trade negotiations around the world, may negatively impact beef prices through the next decade, depending on the U.S. position in such negotiations. 

 Bockelmann explained that, particularly on the Pacific Rim, lower tariff rates as a result of the Trans-Pacific Partnership for countries that compete with the U.S. could spell trouble for prices over the long term.

“Trade is really what caused flat per capita supplies from 2017-19,” he said. “Increase in supplies comes from increased production.” 
Bockelmann commented, “When we think about the importance of trade on the U.S. market, it comes down to per capita consumption and how much beef is available in the U.S. market.”

Elanco Animal Health sponsored the Trends+ webinar. 

Look for more from the webinar in upcoming editions of the Roundup.

Saige Albert 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 – In the food service and meat packing industry, keeping the consumer happy by addressing quality and safety of products is most important, explained President and CEO of Melotte Distributing, Inc. Harry Melotte at the 11th annual Casper College Doornbos Lecture Series on Feb. 21.
    Melotte Distributing, Inc. is headquartered in Green Bay, Wisc. and is a custom meat processor and wholesale distributer. The company, formed in 1976, focuses on high quality value-added products that are safe and reliable.
    As primary focus of his business, Melotte emphasized meeting the demands of the consumer is most important in the meat industry, and that includes maintaining a safe, quality product.
Food safety priorities
    Recent regulatory changes have required the meat packing industry to test for six more strains of E. coli bacteria, explained Melotte, and the rule will be implemented on June 12.
    To address the growing concerns about bacteria, Melotte began implementing a multi-step intervention system over a year ago. His food safety strategies extend beyond traceability, and all meat that enters his facility is thoroughly cleaned before entering the rest of the plant.
    “We started working on it before they came out with the rule,” said Melotte. “As meat products come in, they are declared unadulterated, and we have to deal with them because they may be contaminated.”
    The company treats all their meat products with an organic wash that is considered the most effective tool for intervention. After looking at potential residues, as well as what concentration is necessary to kill bacteria, Melotte noted that the product allows his facility to eliminate contaminants.
    “This wash literally turns to table salt by the time it is done, and has been considered the most effective,” he added. “It costs over $15,000 per month – or about 1.8 cents per pound – to treat all of the meat before it goes into our plant.”
    “It’s our responsibility to our customer and the people that we deal with everyday to make these food safety efforts,” said Melotte, adding that, in two cases in the last year, the intricate system has stopped a contamination at his door.
    To prevent contamination in the facility, Melotte explain that edible oils are used to drive all belts and lift stations, and the equipment is built by the facility.
    “We have a complete fabrication and metal shop,” he said, adding, “We know what will fit our facilities and what we are doing.”
    He also trains all employees in food safety measures.
    “Every person is trained in food safety, why we do what we do, and the importance of safety,” said Melotte.
Traceability in packing
    “There are only two types of plants – those that have had a recall and those who are going to have one,” said Melotte. “There is nothing in between. It may not be your fault, but some product we obtain may be contaminated.”
    Because food safety is a priority for the meat packing industry and to meet the food safety needs of consumers, he has implemented a complete traceability system. Not only does the system allow Melotte to isolate and track every product that comes out of his facility, he has also allowed that each box is numbered and can be easily traced.
    “We put in a system two years ago that tracks every box by license plate number into production through where it is sold,” said Melotte. “I know which packer and box number everything is in, so if I have breaks in the line, I know where to find it.”
    Melotte added that they system is completely computerized and allows him to locate information on all products within 30 minutes or less.
 Maintaining value
    “Never grind what you can dice, and never dice what you can slice,” said Melotte. “The more intact muscle you have, the more money you can get for it.”
    Melotte also emphasized that current market trends are moving toward premium programs, such as Certified Angus Beef, and it is essential for his business to integrate the value-added component of the industry.
    “We need to be on board with the premium programs – it’s not a wish list,” he emphasized. “We have to commit to it.”
    At the end of the day, Melotte said that selling product to consumers is what is important and it is necessary to maintain the value and quality of products to keep consumers happy.
    “The day I quit looking at market trends is the day I might as well retire,” said Melotte, noting that the industry is driven entirely by “the butts” at the table.
    “The people paying the bill – the butts – are the ones who will determine what you sell,” he explained. “The most important people in the restaurant are the butts, because if they aren’t happy, they probably aren’t coming back.”
    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..

Selecting beef products
    Harry Melotte of Melotte Distributing, Inc., who spoke at the annual Casper College Doornbos Lecture Series on Feb. 21, explained that segmented programs require an in-plant selection process to isolate the highest quality meat products.
    “We pull all of the upper end carcasses for the premium programs, and they are segmented based on yield grade and marbling,” explained Melotte. “As the animals are selected off, all we have left is Choice.”
    Though Choice is a good option for less expensive products, he noted that those products tend to be more inconsistent.
    He emphasized that his programs feature genotypic verification of cattle for quality, rather than phenotypic. Cattle are evaluated on their genetics and heritage, rather than hide color or other physical features, and the approach allows him to sell a product that grades in the mid to upper 90 percent.
    “Consistency comes from the premium programs,” he said. “They take the gray area out of what you buy.”


“The biggest opportunity in the U.S. beef industry in the future and for the beef producer lies in opening and developing export markets,” commented Bill Cordingley of Rabobank Wholesale Banking North America in a presentation at the National Cattlemen’s Beef Association Cattlemen’s College, held on Jan. 30 in New Orleans, La.

Cordingley noted the clear trend shows growth around the world. 

China’s growth has reached higher than six percent per year, with 300 million consumers that would be classified as wealthy and able to afford quality food. 

“Indeed, these people want beef,” Cordingley said. “Food safety is a huge issue in China, too, and the same goes for southeast Asia, Europe and many other small markets.” 

As a result, the opportunity to provide safe, quality American beef to consumers around the world could yield big dividends for the U.S. beef industry. 

Export development

“The beef industry in the U.S. has always exported high-value beef to wealthy markets around the world,” he continued, adding that the American export business is built on not only quality but also low cost. 

“However, I believe these markets have yet to be fully developed,” said Cordingley. “Being focused on these opportunities involves reducing the barriers to trade, developing the supply chain and consumer demand in these important markets – all of which will be rewarded over time.” 

Building markets is critical to harnessing export opportunities, Cordingley emphasized.  

“Trade is complicated. Access has always been hard and subject to politics, as we have seen this year,” he said. “This leads to sensible, rational business people to not over-invest in markets that can be here one day and gone the next.” 

“We need to find a way to do better in our ability to export because the consumers of the future will increasingly be outside of the U.S.,” Cordingley continued.

Competition

 With export challenges abundant, Cordingley said the U.S. has one significant advantage. 

“The good news for the U.S. is there are only a few significant competitors for U.S. beef, especially when we look at our high quality grade,” he explained. “Only a few countries produce exportable volume for high-quality beef in quantities that meet the demand of export markets.” 

Canada, Australia, New Zealand, Argentina and Brazil are the most significant direct competitors for U.S. beef, and Cordingley said these countries have limited means to increase the volume of beef they produce.  

“The possible exceptions are Argentina and Brazil, which may be able to grow,” he said. “They all have the capacity to improve quality and challenge U.S. markets.” 

Access

At the same time, some U.S. beef producers are at a disadvantage when it comes to access.

The two largest world markets – China and Europe – are virtually closed to U.S. beef, explained Cordingley, who noted both markets are key to U.S. growth and the future. 

“If these access issues can be improved or resolved, there is significant upside,” he said. “The U.S. cannot afford to miss these export market opportunities.”  

Tariff barriers, such as those in Japan, put the U.S. at a major disadvantage, and unless trade agreements can be negotiated and finalized, the U.S. is likely to struggle in those markets, which is a step in the wrong direction,” Cordingley emphasized. 

Big picture

“Today, exports represent 12 percent of total U.S. beef production, and we’re moving toward 15 percent,” Cordingley said. “Exports contribute well over $300 per head. This could represent 20 percent of production – and much more in value – over the next five years.”  

He emphasized, “We need to harness the tremendous opportunity in southeast Asia, Indonesia, Vietnam and the Philippines, who have emerging consumers and the increasing ability to be able to purchase U.S. beef.” 

Saige Albert is managing editor of the Wyoming Livestock Roundup. Send comments on this article to This email address is being protected from spambots. You need JavaScript enabled to view it..