Tue, 11 Oct 2022 08:19:35 CDT
Senior Farm and Ranch Broadcaster, Ron Hays, is visiting with Oklahoma State University Livestock Marketing Economist, Derrell Peel about the value of imports and exports for the U.S. beef market.
Peel and his colleague, Dr. Glynn Tonsor of Kansas State University had the opportunity to work on a study researching the value of imports and exports of beef. The report was commissioned by the Kansas Beef Council, Oklahoma Beef Council, and the Texas Beef Council. Peel talks about their findings during this study as it applies to the beef industry.
“The bottom line is, there continue to be conversations in the industry about the value of trade and how that value has changed over time,” Peel said. “Sometimes we want to focus on exports, sometimes we focus on imports, but the fact of the matter is, in terms of the reality of trading in a global market, we have to do both.”
This report looks at both beef imports and exports, Peel said, but strictly the meat part. The report asks a question, Peel said, of what would happen if we didn’t trade.
“We looked at it in two stages,” Peel said. “One was a ten percent reduction, and we sort of extrapolate that to what would happen if we just totally withdrew from the global market.”
A ten percent reduction in import and export trade, Peel said, would mean billions of dollars worth of losses for both futures and fed cattle sellers.
When running different adjustments for imports and exports together through the economic model, Peel said the net impact over a ten-year frame of a 10 percent reduction in trade was valued at over 12 billion dollars of impact on feeder cattle producers and over 6 billion dollars in the feedlot sector.
On the imports side of the equation, many people have a hard time understanding why the United States is allowing international beef to come in and compete with us when we have an adequate amount of beef to feed the country. Peel says the beef market is much more complex.
Once each individual animal is fabricated, Peel said thousands of basic products are produced and each has its own market.
“The markets are related in some cases, heavily related in some cases, so both imports and exports are driven by this underlying tendency of any market to seek out value, and so in the case of beef imports, we seek out value because we have such a huge ground beef market primarily in the U.S.- that is the primary driver of the imports- and we need additional lean to drive that market.”
Peel said the United States brings in additional lean to supplement domestic production of cull cow beef and other lean products that we can use, but also as a way to add value to our fed cattle because it gives us the ability to utilize all of the fatty trimmings from fed cattle in the ground beef market by supplying the additional lean that we need to turn it into ground beef products.
To read more conclusions from the report estimating the impacts of ceasing both U.S. beef exports and imports, click here.
Click the LISTEN BAR below to listen to Ron Hays and Dr. Derrell Peel talking about the value of beef trade for the United States.
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.
Ron Hays Beef Buzzes with Derrell Peel about Trade Value