Feed Lot Magazine Online, Sept/Oct 2005

Volume XIII Number 5

Sept/Oct 2005

Producers Should Consider All Export Markets

by Bob Strong

“The European Union (EU) was one of the few major regions that did not ban U.S. Beef following the U.S. case of bovine spongiform encephalopathy (BSE) in December 2003,” said Cheryl Kamenski with the U.S. Meat Export Federation (USMEF). “As a result, U.S. beef and beef variety meat exports to the EU in 2004 totaled 46,316 metric tons (mt) worth almost $34 million, an increase of 254 percent in volume and 115 percent in value. This made the EU the second largest export destination for U.S. beef last year.”

Despite those numbers, it is not enough beef to meet the region’s needs. “The EU has a large and growing beef deficit expected to reach 450,000 metric tons in the next two years,” said Jackie Hruby, USMEF. “This deficit comes from a decline in beef production and a recovery in beef consumption following the BSE crisis in Europe a few years ago.”

What is holding the U.S. back from exporting more beef?

Because of the illegal use of hormones in livestock production in several European countries in the 1970s, the EU commission banned the use of hormones in livestock production in 1989. The United State’s challenge to the hormone ban is based on arguments that it has no scientific basis.

These restrictions on American beef have severely limited exports to the EU. What has changed is the growing beef deficiency created in the EU by animal disease out breaks and changes in agricultural policy. This change has now made the EU the largest importer of beef in the world.

• Brazil is now the largest EU supplier and is adapting to the EU standards.

• The 25 EU member countries are second only to the U.S. in worldwide beef consumption.

• Issues such as Foot-and-Mouth disease (FMD) and BSE have changed EU policies to emphasize
reduction in concentrated beef production, government subsidies and unprofitable operations.

• Much of the beef traded in the EU is from grass-finished cattle.

• The USMEF is positioning U.S. beef as a premium product in the market because of its quality since it comes from grain-finished cattle.

• U.S. beef can retail at several times the price of Brazilian beef.

“Even if the U.S. producers don’t want to abide by the EU rules and regulation, the market is becoming so big that we have to pay attention to it since it helps drive world supply, demand and prices for beef.” USMEF Vice president Richard Fritz said. “We cannot ignore the biggest market in the world.” ©

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