U.S. beef export brand remains strong

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FARGO, N.D. — World consumers of American beef are not always the same as the U.S. consumer, and that's a good thing, said Paul Clayton, senior vice president of export services with the U.S. Meat Export Federation.

Clayton, based in Denver, spoke at the North Dakota Stockmen's Association annual meeting and trade show in Fargo and offered an optimistic view of the future for red-meat exports. The MEF is a non-profit organization that develops world market red meat — beef, pork, and lamb. It is funded with checkoff dollars with 18 offices throughout the world.

Clayton acknowledged beef exporters were disappointed with the Trump administration's withdrawal from the Trans-Pacific Partnership trade agreement but are hopeful they'll follow up with "suitable" agreements with individual countries.

Similarly, Clayton said he hoped changes in the North American Free Trade Agreement will help and not hurt meat trade with Canada and Mexico.

"Let's hope there's some kind of upside," he said, adding, "We had a pretty good deal, with no tariffs or duties" under the original NAFTA.

Big changes

World meat markets are changing. Today companies are setting food standards beyond country standards, Clayton said. Walmart, for example, is in 27 countries and sets its own rules for food safety and animal welfare. Sustainability standards may follow.

Consumers are shifting back toward seeing some fats as good.

Feedlot-fed beef is an unusual product for many consumers throughout the world. U.S. grass-fed beef isn't usually available for exports, because there is a higher-priced domestic market, and it competes with foreign beef, which is often grass-fed.

Asian middle classes will continue to grow, increasing demand for beef.

In Korea, 95 percent of the consumers use computers, and social media is growing.

In India, Pakistan and Bangladesh, the cow is sacred, but they "do consume water buffalo." Water buffalo females are kept to first produce milk before they are consumed. Bull calves often don't survive.

"Some claim that India is the largest beef producer," Clayton said, although data isn't reliable.

The U.S. would have to export frozen meat to those countries and likely would export the "variety meats," such as liver and tongue, that American consumers aren't so fond of consuming. The value of those cuts in export markets is about $1 per pound, while U.S. consumers would pay only 15-30 cents per pound for the cuts, which also would possibly be used for pet food.

The homefront

American beef consumption trends are ticking up in 2017 but are likely to flatten out next year. Clayton expects a 12-percent increase in U.S. consumption by 2025.

Very little U.S. ground beef is exported. With 320 million people in the U.S., about 100 million servings of ground beef are consumed daily.

Purchasing on the web is continuing to grow, as is the practice of food makers and grocery providers delivering to the home in the metropolitan areas.

"We have consumers that are busy," and want to do things other than shopping, Clayton explained.

He noted that Amazon purchased Whole Foods and is creating lockers for consumers who want to pick up pre-assembled orders. International fast food markets are offering consumers the ability to order in advance. The trend is worldwide, he said.

The U.S. Department of Agriculture's Agricultural Marketing Service has 86 different certification programs in beef, some for breeding programs such as as certified Angus or Hereford, verifying genetic percentages. This can be helpful in some export markets.

Disease threats — either in the U.S. or foreign countries — are the biggest threats to U.S. meat exports, despite the fact that U.S. standards are "robust." Technology such as GMOs, gene editing and food safety preventative chemicals are challenges.

Clayton said the U.S. lost some market share after the mad-cow-disease crash in 2003, referring to bovine spongiform encephalopathy, or BSE.

"We've pretty well recouped the volume we had prior to BSE," Clayton said.

Mexico re-entered quickly, but Japan and Korea have been added between 2006 and 2008, and the U.S. is working to get animals over 30 months of age accepted. The Chinese market reopened earlier in 2017 and shows promise, he said.