Calgary livestock analyst Barbara Duckworth recently covered the National Cattlemen’s Beef Association convention in Phoenix, Arizona, and filed these reports.
PHOENIX, Ariz. – Japan, South Korea, Canada and Mexico are the prime beef sales targets for JBS Swift Co., says its senior vice-president for international sales.
These countries are strong meat consumers, politically stable and are probably able to pay for their purchases, said Dan Halstrom of JBS Swift speaking at the annual National Cattlemen’s Beef Association convention in Phoenix Jan. 30. The four nations combined buy about three-quarters of the export beef Americans have to offer.
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The company enjoyed brisk sales in the first three quarters of 2008, before markets pitched downward when customers in South Korea and Russia stopped paying on time and the world economy started to falter.
“These are short-term obstacles that we as exporters just have to overcome. These things happen. It is part of business,” he said.
Lessening demand, political instability and depreciating currencies have all taken their toll, Halstrom said.
Currency values are a problem. For example, beef cuts sold last year in Mexico for $1 are now priced at $1.40. Those increases have many Mexicans shifting to cheaper meats like chicken that is produced domestically.
If Mexico and Canada stopped trade with the U.S., that beef would have to go elsewhere and the losses to companies like JBS could be considerable.
Demand for meat is expected to increase worldwide and the U.S. expects to export six percent more in 2009.
“The global supply is not there to meet the total world demand. There is not enough meat to go around long term.”
He said new approaches to business are necessary.
In Japan, for instance, the company is trying to sell beef to caterers and those who supply lunches to convenience stores.
The main issue is getting wider access to Japan because it could add an extra $90 per head. Last year 11 percent of U.S. cattle qualified for the Japanese market.
Even if Japan agrees to take beef from animals younger than 30 months instead of 21 months, retailers will still demand proof of age, Halstrom said.
