SAN ANTONIO, Texas Ñ Losing its best beef customers due to BSE is costing U.S. producers.
In the last 12 months, American beef exports dropped to 450 million pounds from about 2.5 billion lb. per year, resulting in a $13-$15 US per hundredweight reduction on the value of a carcass.
In the past, short ribs, short plate, tongue, liver and chuck eye roll were exported to Japan and South Korea.
Loss of those markets costs about $45 per head because they were willing to pay more for those cuts, said Randy Blach, executive vice-president of the American market analysis firm Cattlefax.
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The new export realities were discussed at the National Cattlemen’s Beef Association meeting Feb. 2 in San Antonio.
The U.S. lost its key export markets after a dairy cow in Washington state was diagnosed with BSE in December 2003. The cow was imported from Canada, but that did not stop Japan, South Korea and others from banning U.S. beef. The Americans hope Asian buyers will resume trade by the second quarter of this year.
Since the December incident, U.S. beef sales dropped from $3 billion in 2003 when more than 60 countries bought U.S beef to $450 million in 2004 when about 20 countries accept small amounts. Mexico is now the major customer. Japan was the best customer, worth about $1.4 billion.
Losing export markets was equivalent to adding about 55,000 head to the weekly slaughter.
The damage was mitigated by the fact that the U.S. had its smallest calf crop since the 1950s. The U.S. herd on Jan. 1, 2004, was slightly less than 95 million head because farmers and ranchers had been reducing herds for eight years due to drought and poor markets. Domestic beef production dropped to 24.6 billion lb.
While beef struggles through its BSE crisis, other meats are gaining market share globally.
Fish is the most important animal-based protein in the world, making up 35 percent of the total commercially produced mix. Pork is 25 percent, poultry 20 percent, beef 15 percent and goat five percent.
“We’ve allowed pork to enjoy a tremendous increase in exports. We’ve taught the world to eat pork,” said Blach.
Improved incomes around the world encourage people to buy more meat but many are selecting pork, poultry and fish, said analyst Mike Miller.
Beef consumption is flat, with more growth in pork. China dominates global pork production and consumes all it produces.
“Hopefully the next thing on the food chain will be beef,” said Miller.
However, China is likely to buy from cheaper suppliers such as Brazil, Argentina or New Zealand.
“Probably the first place China will look for beef won’t be the U.S,” he said.
Brazil is going to be a major competitor in beef, pork and poultry. It has increased it beef exports by 466 percent in six years and is expected to export 1.6 million tonnes in 2005.
Brazil is geared to different markets than the U.S. It consumes large amounts domestically and has developed niche markets in Europe.
