Agricultural News
USMEF Finding Alternatives for Price Sensitive International Customers
Mon, 24 Nov 2014 14:46:28 CST
Tight cattle supplies have resulted in record cattle prices. It doesn't matter if you are talking about calves, yearling, mamma cows, replacement females, along with the steers and heifers that go to packing plants that are ending up as the beef for domestic and international markets. In the case of the international markets that caused a few challenges for the US Meat Export Federation (USMEF). That's according to USMEF Assistant Vice President International Marketing & Programs Greg Hanes said they have had to switch pitch a few countries that have gotten used to certain cuts that have simply become too pricey.
"You will see some markets that are much more price sensitive than others," Hanes said. "You have bigger markets say like Japan where they are our biggest market, big importer they're complaining about the prices but they are still buying, then you have other markets say like in southeast Asia where they would be buying a lot of those same kind of cuts that maybe we would be selling into Japan or in Korea. They don't quite have that spending capacity that they do in these markets, so what we have done is we really tried to target and identify additional cuts, we call them 'alternative cuts' that they can still use in a lot of different cooking styles and yet it gives them more value for their money. Like in Taiwan for example we have really been focusing on the clod heart and the petite tender and had great results with that. So what you are seeing now those kind of cuts are going into these markets and then kind of the traditional cuts that say the Japan, Koreas or even Hong Kong maybe buying are kind of staying along their traditional lines."
Radio Oklahoma Network Farm Director Ron Hays recently caught up with Hanes in Stillwater after he briefed the Oklahoma Beef Council board about the export situation and outlook for beef. Click on the LISTEN BAR below to listen to the below Beef Buzz feature.
In the case of the Japanese they are buying US beef even though the prices are high. Hanes said at least they now have the opportunity to utilize US beef year around as their important standards changed two years ago. Previously Japan could only import US beef from cattle 20 months of age and younger. When Japan changed their import standard to import beef from cattle of 30 months of age and younger that increased their access of US beef.
"It was difficult because what would happen with the 20 month of age rule you would get higher supplies in the summer when their more aged cattle appropriate for that, but in the winter the supply would drop down significantly," Hanes said. "So not only the smaller suppliers or buyers there and even a lot of large companies, the big retail companies or food service chains they had a hard time being able to get that consistent supply. So they might do kind of spot promotions but they wouldn't be able to feature US beef on their menus or at their stores year around. They just didn't think it was worth the efforts because here they put in all this time and effort in creating the story or brand and here is US beef, then it would be gone."
When Japan changed their import standards two years ago to accepting US beef from cattle 30 months of age and younger was a huge change. Hanes said that has allowed the US to provide very consistent supply levels year around.
"Now the key part is making sure these buyers understand that a lot of them haven't been exposed or tried US beef for ten years maybe," Hanes said. "So reeducating them or educating these newer buyers so that they understand it and get the product out there and able to sell it again. So it's a bigger challenge than you might think."
Even with these higher prices, the US has been able to grow our share in the Japanese beef market. Overall US beef exports continue to grow. USMEF is predicting a record year in terms of value in forecasting exports as high as $6.8 billion dollars for 2014.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network- but is also 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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