Beef growth comes from new markets

SAN ANTONIO, Texas — The U.S. beef industry has made a remarkable 10 year turnaround in global markets.

Last year it exported $7.13 billion worth of beef to 100 countries, which was a 16 percent increase over the 2013 record.

“The fact that the demand for beef internationally is a double digit figure is significant,” said Phil Seng, head of the U.S. Meat Export Federation.

The achievement was reached at a time when beef stocks were considerably lower than normal, he told an export committee meeting held during the National Cattlemen’s Beef Association convention in San Antonio, Texas, Feb. 3-7.

Much of the success can be attributed to increased buying power in areas such as Asia, where the middle class is growing with more disposable income.

It is also meaningful to domestic beef producers.

The market analysis firm Cattlefax estimates this adds $340 to the value of a live animal compared to about $250 per head in 2013.

Japan is the top customer in terms of value at 241,129 tonnes, up three percent from 2013. Mexico leads in volume at 242,150 tonnes, up 12 percent from the previous year.

Hong Kong imported 154,000 tonnes, up 19 percent.

However, the greatest decline was Canada, which was once the best customer for U.S. beef. Imports were at 137,532 tonnes last year, down 21 percent from the previous year.

The demand for beef is an international phenomenon. The top exporter is Australia, followed by India and Brazil. The U.S. is in fourth place.

Australia has been aggressive on many fronts, signing free trade agreements with Japan and South Korea and gaining favourable access to China, the world’s largest importer.

Japan is one of the best markets because it imports 500,000 tonnes a year and is willing to pay for quality.

However, a tariff of 38.5 percent continues on U.S. beef until a deal is reached through the Trans Pacific Partnership. Australia pays a 30 percent duty.

Other factors also affect trade, such as political disagreements over the use of growth promoting hormones and ractopamine or sanctions that may be imposed because of disease or war.

Labour strife on the west coast has backed up container ships that can’t be loaded. Much of the beef and pork leaving the U.S. is chilled and has a limited shelf life. Some will be frozen, which devalues the product.

Asia is not the only area with which the export federation wants to do business.

It also wants to be more active in the Middle East. For example, Egypt is a prime market for liver, but whole muscle cuts could also end up there. Other exporters are already active in the region.

“You have the world exporting to this region. India is huge there,” said Dan Halstrom of the export federation.

However, most of the Indian exports are products derived from water buffalo.

“It doesn’t really compete with us, but it is good they are exporters because they are laying the groundwork in some of these developing markets and creating a need for beef,” said Greg Hanes, also from the export federation.

“As they (importers) move up, they will want higher quality products and we can step in.”

Africa is also under consideration.

The meat export federation made six trips last year to assess doing business with countries in western Africa. The U.S. already ships poultry to that region.

“Where poultry goes today, as those economies develop, there is an opportunity for U.S. beef,” Hanes said.

Meanwhile, Africa has continuing challenges with financial uncertainty, undeveloped infrastructure, corruption, lack of cold storage and high interest rates.

Contact barbara.duckworth@producer.com

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