22 December 2008

3 minute read

North America

According to Andy Groseta president of the National Cattlemen's Beef Association despite fluctuations in global markets, increasing foreign trade remains a key to the profitability of US cattlemen — now and in the future. Writing in AgWeek Mr Groseta said: "Exports are critical to cattlemen because today they add about $180 per head to the price we receive for our cattle. Some part of virtually every animal harvested in the United States ends up in a foreign market where consumers pay more for cuts such as livers, intestines and tongues, which aren't too popular in American homes. The profit equation is pretty simple: $5 a pound overseas vs. 38 cents a pound domestically." He added: "Profitability through exports hasn't happened by accident. NCBA has worked tirelessly with government officials, helping prepare them to strongly advocate market access benefiting all cattlemen. "We knew the process would be long and at times frustrating; we knew that by following the science and being transparent in our process — not protectionist or unjustifiably critical about the safety of the US beef supply — we would regain access to these markets. That work is paying dividends. "Through August, sales to Japan measured in carcass weight were up 50 percent from a year ago. Despite that progress, there’s still $1 billion in sales we can recapture to be at 2003 levels. "South Korea’s market for US beef, after sputtering through the summer, had just begun to hum before the financial crisis hit. The price of short ribs, a favorite in the Korean market, had increased 35 percent from a year ago, according to the U.S. Meat Export Federation. The chuck cut-out, the price of which is driven largely by export demand, was up 25 percent from a year ago; and August beef exports, valued at $416 million, set an all-time record for monthly sales in any month, led by an all-time monthly high of $150 million to Mexico. This was 50 percent more than the monthly average for 2007. "As all wealth in the cattle industry comes from the consumer, this shows that the global consumer is a part of the demand equation U.S. cattlemen can't afford to ignore. The ability to significantly grow our business lies in the developing economies around the world. "Today, the majority of this business is at our borders. Canada and Mexico account for 60 per cent of all U.S. beef exports so far this year. Our relationship with Canada and Mexico on beef and cattle trade plays to the strengths of the US industry: We are the most efficient producer of grain-fed beef on the planet. Yes, this trade relationship involves imports of Mexican and Canadian live cattle, but the current market structure allows the value to be added on the US side of the border. That is of enormous benefit to our domestic production. Restricting this trade unquestionably would instigate a trade war with our No. 1 and No. 2 export markets. "NCBA members think exports are critical to the profitability and viability of the US cattle industry. We must continue to market nutrient-rich beef to our fellow Americans, but we also must offer our superior product to the other 96 per cent of the world"s population."

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