2011 global meat trade breaks records
November 17, 2011
“U.S. exports will post a solid performance through year’s end, because global demand is strong and the pricing environment is roughly the same as it was in the final quarter of 2010. During that time, U.S. beef and pork exports achieved very solid results,” reported the U.S. Meat Export Federation (USMEF).
In a recent press conference, USMEF discussed the latest issues affecting U.S. beef, pork and lamb exports and global meat trade, including newly enacted free trade agreements, global and regional consumer demand trends and the competitive landscape facing U.S. meat exports.
The session featured comments from outgoing USMEF Chairman Keith Miller, incoming USMEF Chair Danita Rodibaugh, USMEF President and CEO Philip Seng and several of USMEF’s international directors. Guest speakers included Cornell University economist Dr. Harry Kaiser, who recently completed a return-on-investment study of USMEF’s export market development programs; Bill Rupp, president of JBS USA’s beef division, and John Bellinger, CEO of Agri-West International. Each offered thoughts on the role exports play in the profitability of the U.S. meat industry.
“Both U.S. beef and pork exports are projected to set new value records in 2011, with each breaking the $5 billion mark for the first time ever,” Miller said. “It’s an exciting time in the U.S. meat industry.”
As more beef and pork heads overseas, the big question is: what’s the return to U.S. cattlemen?
“It’s very important to talk about the value of the return to U.S. producers,” Rodibaugh said. “One way to measure the return from exports to producers is to look at it this way – export values peaked in July at nearly $237 per head and remained strong at $214 per head in August. Exports as percentage of total production is also an important factor to look at. This ratio has been very strong for pork and beef. We are expecting 14 percent of beef exported compared to 12 percent a year ago, with a July peak at 15 percent.”
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Rodibaugh talked about a return-on-investment study that was commissioned by the USMEF.
“The study evaluated the investment of checkoff funds used in export marketing, and the study proved favorable to U.S. producers,” she added. “For every industry dollar invested in checkoff export marketing, there is a $3.87 return to the U.S. beef producer.”
The export market continues to grow at a rapid rate, which will help maintain high prices for cattle here in the U.S.
“I’m proud to say the U.S. beef industry should be the leading exporter in the world this year, exceeding the competition – Australia and Brazilia,” Seng said. “The export market has been very helpful in driving the prices. This is really exciting as far as profitability goes. We have much to celebrate with 35 years of being very aggressive in the export market. Of course, we have many challenges too with issues our consumers are becoming increasingly concerned about. Consumers around the world are demanding to know more about our products on issues such as environment, ethics, food safety, production technology, corporate social responsibility and animal welfare. And, they want to be able to find this information with the scan of a bar code.”
Looking at 2012, Seng said the forecast for beef is $5.5 billion.
“If we hit $5.5 billion in 2012, we would be at 16 percent of production, with value going to $218 per head,” Seng predicted. “I’m also very proud that the U.S. red meat industry has stepped up to the plate on assisting Japan after the earthquake. We raised about $550,000 to help the stricken areas in this country and distributed more then 80,000 meals. The U.S. aid effort is still going on today.”
The future of the U.S. beef cattle industry continues to look bright. Simple supply and demand scenarios will keep beef prices high, and a growing export market will continue to drive demand.