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Experts say global beef demand outlook positive
But what about the supply side?

By Codi Vallery-Mills

The U.S. Meat Export Federation Board of Directors met last week in St. Louis for a product showcase and conclave of experts from the beef, pork and lamb sectors.

Reports from the director meeting are positive for the U.S. meat exports. In a media conference call President and CEO Philip Seng says that the first three months of 2010 have gone well despite economics. An increase of 11 percent has been seen in export volume and a 14 percent increase has been seen in value.

"We are coming out of a worldwide recession and competition has stepped up in the trade markets with everyone rushing to sign agreements. There is an increase and emphasis on trade agreements," warns Seng.

Jim Peterson a cow/calf producer from Montana and also the USMEF chair says the goal is to improve working relationships with other countries to improve consumption levels of U.S. meat. He believes there are tremendous opportunities for U.S. product.

He says between 2008-2018 it is expected pork consumption will be up 20 percent, which is 1.8 times the amount of pork produced in the U.S. in 2008. Beef will be up 15 percent an equivalent of three-quarters of beef currently being produced in the U.S. Domestically there will be a growth of 5 to 8 percent in consumption.

Global Outlook

John Brook, USMEF Europe Director reports demand in Russia is going strong and is back to its 2008 levels. The nervousness felt from Greece's debt and the rumor that the Euro is on the verge of disappearing is "ridiculous" according to Brook who reminds everyone that Greece only makes up 2.5 percent of the European economy.

He also reports the Middle East has a strong market for beef livers and is beginning to gain a market share in high-end markets. "We are very competitive against Australia in the Europe market," says Brook.

Mexico and Central America is not a thriving picture for beef according to USMEF Mexico and Dominican Republic Director Chad Russell. He says this is due to less variety meats coming from the U.S. and the increase of poultry and pork consumption. Russell says Russia's open-ended ban on U.S. chickens has caused the product to go elsewhere - to Mexico. Beef hasn't been able to compete because Mexico prohibits some beef products yet as a result of BSE regulations.

"Two weeks ago the Mexico Ag Ministry and the U.S. Department of Ag were part of a discussion that addressed those restrictions but no resolution was agreed upon," says Russell. "It isn't their ag ministry that is holding things up but rather their health ministry."

In Asia, Japan continues to be a key volume market for beef and pork products. Joel Haggard USMEF senior vice president for the Asia Pacific region says the beef outlook is positive across the board and while more market access would be nice, the picture is looking "rosy".

Concern over a political election in Japan is worth watching though as the current Farm Minister in Japan risks the chance of being moved into a different position once new leadership is elected. Before being placed with the agriculture ministry he was a well-respected cabinet member.

Haggard says there has been indications of a pledge between Japan and the U.S. to improve export relations and says he is a big proponent of have having those talks before the Japan election later this year.

In China, Seng cited Hong Kong as one of the most rapidly growing destinations for U.S. beef. Though limited to boneless cuts from cattle less than 30 months of age, this year's U.S. beef exports to Hong Kong have more than tripled their 2009 pace.

"There are more than 40 countries currently supplying beef to Hong Kong, which shows you just how competitive the international marketplace really is," Seng said. "This also illustrates how important it is that we differentiate our product. Our competition is well aware of the opportunities in these key markets and they are doing everything they can to avail themselves of those opportunities."

Opportunities in key markets are great but the USMEF acknowledges there is a critical issue of being able to supply meat to those markets. The U.S. cowherd is shrinking and demand interest is on course to outpace supply.

"Currently we are addressing the issue by developing alternative cuts of meat," says Seng. "It is critical to maintain market share and if we are not successful we will lose it to someone else."

Copyright 2009 The Cattle Business Weekly. All rights reserved. This material may not be published, broadcast, rewritten or redistributed unless permission is granted from the editor.

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BeefTalk: The Burden Is on the Producer to Use the Right Tools

Growing cattle generate dollars to cover the daily upkeep and contribute to the income pool at the end of the day.
By Kris Ringwall, Beef Specialist

NDSU Extension Service
Growth and average daily gain remain tops in the feed yard. Regardless of how and when growth is measured, cattle that grow are needed.
Growing cattle generate dollars to cover the daily upkeep and contribute to the income pool at the end of the day. The fixed costs of the beef business must be paid, but fixed costs can only be met once the variable costs are paid, which takes growth.

There is no question product quality is critical as well. However, that discussion is for another day. Why this discussion about growth?
The industry continues a longstanding history of discussion on cattle size. Cattle have increased and decreased body size subject to the needs of the beef industry.

More recently, producers again are questioning what direction to go and how best to make a buck in the beef business, but it takes more than a buck to survive. The bottom line is that mistakes are merciless. Income needs to exceed expenses.

The Dickinson Research Extension Center has two different sets of cows. Herd A averaged 1,406 pounds as the cattle were sorted to spring pasture. Herd B averaged 999 pounds. For discussion, let's say the cows averaged 1,400 and 1,000 pounds, respectively.

The two herds are not being maintained to directly compare the impact of cow size. However, maintaining and managing the two herds does bring up some good points. Obviously, the stocking rates based on Natural Resources Conservation Service guidelines and nutritional requirements based on National Research Council guidelines are met for both groups.
Interestingly, given all the debate or at least active discussion regarding what is the correct cow size, information is available on the proper management of the cow once the size is selected. In addition, if one keeps the end product in mind, that is efficient red meat production, the genetic component is quite manageable as well.

About the center’s upcoming breeding season, several bulls have been picked to allow for the continuation of herds A and B. Herd A is a typical, heavily Angus-influenced herd.

The herd will be artificially inseminated by several Angus sires that are available commercially.

The average expected progeny difference (EPD) values for the bulls utilized are: (the average value for the bulls is listed first followed by the average for the Angus breed in parentheses)

For the common growth traits, the birth weight is 1.56 pounds (2.1 pounds), weaning weight 43 pounds (43 pounds) and yearling weight 81 pounds (79 pounds). For milk production, the bulls averaged 25 pounds (21 pounds).

For carcass traits, the carcass weight is 10 pounds (11 pounds), marbling 0.29 (.28), ribeye area 0.23 square inch (0.13 square inch) and back fat 0.03 inch (0.01 inches). The bull battery is pretty typical of Angus but with a bit more ribeye than average.

The herd B cows are bred naturally to Red Angus bulls. The average EPD values for the bulls utilized are: (the average value for the bulls is listed first followed by the average for the Red Angus breed in parentheses)

For the common growth traits, the birth weight is minus 2.8 pounds (minus 0.02 pound), weaning weight 28 pounds (32 pounds) and yearling weight 58 pounds (60 pounds). For milk production, the bulls averaged 21 pounds (17 pounds).

For carcass traits, the marbling is 0.19 (.06), ribeye area 0.23 square inch (0.05 square inch) and back fat 0.01 inch (0 inches). The herd B bull battery is considerably lower in birth weight and slightly lower in weaning and yearling weight compared with the average Red Angus bull but considerably above average for ribeye.

The impact on those cows that are smaller is less emphasis on growth but a stronger emphasis on muscle.

The tools are in the tool chest to manage cows for the chosen management plan. The burden is on the producer to use the correct tools.
May you find all your ear tags.

Your comments are always welcome at http://www.BeefTalk.com.

For more information, contact the NDBCIA Office, 1041 State Ave., Dickinson, ND 58601, or go to http://www.CHAPS2000.com
on the Internet.