 |
|||
|
|||
|
|
|||
According to Andy Gottschalk with Linnco Futures Group and part of a third generation involved in livestock and grain production in Kansas, there is a lot of misinformation concerning imports and exports. Recent increases in imports are because the U.S. is the highest priced market in the world, he said. U.S. exports of beef, however, are growing and projections are that they will continue to grow with some slow down next year. "When we had our highest net imports, we had our highest cattle prices," he said. "1990 was the highest annual average price ever recorded. We averaged $79 that year. In 1993, in March, prices averaged $82.50, the highest monthly price we ever had." Gottschalk said that tells him that imports aren't the problem. In fact, the U.S. needs to import beef. Sixty-five percent of the imports is a blending product that is used with U.S. hamburger. It is 90-10 trim or 90 percent lean and 10 percent fat. That meat goes into a mix with ground beef from U.S. feeding operations that it is 50 percent lean and 50 percent fat. "We have a shortage of 90-10 trim so we import that," Gott-schalk said. "We blend that and that's how you get your 73 percent lean, your 85 percent lean, your 92 percent lean in the store." By importing, the industry creates a base from which they can add value to the 50-50 trim. "We have to increase our imports of 90-10 trim to blend with that to mix it up into hamburger," Gottschalk said. "If we didn't do that, your 50-50 trim which is probably about 42 cent a pound would be worth nothing." Since 1990 beef production has increased 3.1 billion pounds. Pork was up over 3.7 billion.. Broilers were up over nine billion pounds. Total meat production increased over 16.5 billion. Gottschalk said that imported beef didn't harm the domestic beef industry nearly as much as the 13.4 billion pounds of increased production by competing meats. Since 1980, beef captured only 10 percent of new spending on meat products. The competition captured the other 90 percent, most of it going to poultry. "I don't care what you produce, if nobody buys it, you're going nowhere," he said. "Money doesn't come from the packer or the retailer. It comes from the consumer." Across the nation, people are improving their incomes, and it shows in meat purchases. Spending on pork during the first six months of 1999 increased faster than any other meat. Conversely, pending declined on only one meat item, turkey. "Doesn't that make sense as you go up the protein chain?" Gottschalk said. "They can afford pork before they can buy beef." The beef industry has to focus on the domestic economy to maintain a strong demand base. "The domestic economy is 91 percent of your market," he said. "Exports are only nine percent." If you concentrate on exports, you'll forget the American consumer, and the American consumer is going to forget about you. The biggest bang for your buck in right here in the United States. It's 10 times bigger than your export market, he says. |
|||
|
|
|||
|
|
|||
|
All information is copywrited by Feed Lot magazine and cannot be printed or re-printed
without the publishers express consent. Please contact
Feed Lot Magazine for reprint and copy authorization.
|
|||