Beef Buzz News
Dan Halstrom Anticipates More Billion-Dollar Sale Export Months for Beef Exports but Warns of Headwinds
Tue, 21 Jun 2022 09:57:06 CDT
Senior Farm and Ranch Broadcaster, Ron Hays, is back with the president and CEO of the U.S. Meat Export Federation, Dan Halstrom, talking about the beef export outlook for the remainder of the year.
So far, 2022 has been a good year for beef exports. Three of the first four months in 2022, Halstrom said, were billion-dollar sale export months. For the rest of the year, Halstrom believes we will see a similar pattern.
"We are up five percent year-to-date," Halstrom said. "Our number for the year is between four and five percent, maybe slightly slower, but nevertheless a new record this year on the tonnage side, and the value is going to be up quite a bit more because prices are higher."
Multiple markets, Halstrom said, including Japan, Korea, and China are doing exceptionally well. In April, he added, Japan had the best month of the year and China has been up for the last year and a half.
In Central America and Latin American countries, Halstrom said the markets are up as well.
"The Caribbean is interesting because they had been back from Covid for over a year and food service and hotel business in the Caribbean is booming," Halstrom said. "Hotels are 90 plus percent or even 100 percent booked, and restaurants are packed, so there are a lot of things coming together that are positive."
Despite high demand in the markets, Halstrom cautions of the looming headwind of inflation.
"We all know what is going on with inflation and we all know what is going on with fuel prices, fertilizer prices, grain prices, and meat prices," Halstrom said.
While demand is strong at the moment, Halstrom said some of these countries' spending power is bound to become more limited eventually.
"We haven't seen it yet, but we see signs of it," Halstrom said. "We have that factored into our forecast as well but it's just something we have got to keep our eyes on. The bottom line is, that we have a very unique product globally and in the last year and a half, we have seen people paying for it."
One product that has had tremendous success over the last year is variety meats with billions of dollars worth of sales. While it has been a challenge having enough labor to capture all of the variety meats the market wants, Halstrom says we are getting closer.
"I do sense that maybe it has gotten a little better," Halstrom said. "It would be reflected in the variety meat capture rates compared to where we were a year ago, that there is a higher percentage of variety meats being captured."
It is good news there is an improvement, Halstrom said, but the labor continues to be short as a whole across the entire agriculture supply chain. Looking ahead, Halstrom said that the labor shortage seems to be improving and he can anticipate another billion-dollar year for variety meats.
"The demand is there," Halstrom said. "Keep in mind that a lot of the variety meats go to places like the Middle East and Africa."
118-dollar barrel oil is not necessarily good news for Asia and for the U.S., Halstrom said, but it is good news for some of those regions because a lot of their spending power is based on factors such as oil and natural gas.
"Make no mistake, there is increased spending power in places like the Middle East, such as Egypt, for example, or Angola," Halstrom said. "Africa is very reliant on oil, so there are some indirect positives from a high oil price, and I think that will help variety meats."
Click the LISTEN BAR below to hear more from Ron Hays and Dan Halstrom on the outlook for the beef export market in 2022.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR below for today's show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
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