When the cattle industry’s Joint International Markets Committee met Friday (Feb. 3) afternoon in Nashville, USMEF Economist Erin Borror offered a presentation on the impact record-large beef exports are having on cattle producers’ bottom line. When December results are available, U.S. beef exports (including muscle cuts are variety meat) are expected exceed $5.3 billion in 2011. While this is easily an all-time record, Borror said it’s also import to note that the U.S. industry’s net beef exports may be as high as $2 billion. She also noted that the ratio of U.S. fed beef production being exported is about 17 percent.
Borror explains that beef cuts that are typically exported – such as chuck, round, short plate and liver – have increased in value and made the beef cutout less dependent on middle meats. This has been especially important during difficult economic times in which consumer demand for middle meats has been sluggish.
TRANSCRIPT:
Joe Schuele: This is Joe Schuele with the U.S. Meat Export Federation report. When the cattle industry’s Joint International Markets Committee met Friday afternoon in Nashville, USMEF Economist Erin Borror offered a presentation on the impact record-large beef exports are having on cattle producers’ bottom line.
Erin Borror: Not to understate the value of the U.S. domestic market by any means, but really the future growth, and certainly what we’ve seen the last couple of years, is coming from demand outside of the U.S. So through November, our net export value for beef and beef variety meats was $1.9 billion. So we could be around $2 billion in net exports when we get the final data for 2011. And that’s tremendous, especially if you look back at the Long Range Plan goals even from several years ago, it’s very encouraging. We’ve also exported more and more as a percent of production. I’ve estimated the percentage of fed production because in most of our markets we still just have access for under-30 cattle. We’re exporting around 13 percent of just muscle cuts and closer to 17 percent when you include variety meats during 2011. And you can see that widely exceeded, in a lot of months, what we were doing in 2003.
Joe Schuele: Borror also explained that beef cuts that are typically exported have increased in value and made the beef cutout less dependent on middle meats.
Erin Borror: Really we’ve been able to spread that value across the entire carcass instead of being heavily weighted on the middle meats. Of course that’s been really beneficial with the U.S. consumer ability to pay for middle meats struggling. We’ve added more value to the chuck, round and short plate items and that increase, per head, was around $188 on the whole cutout. And looking at the chuck, round and short plate, they accounted for about 50 percent of the Choice cutout value, while the middle meats where just 44 percent. So again, it comes down to maximizing that carcass value and when the packer is able to get more for every piece he can pay more for those fat cattle and it trickles down the line all the way to the cow-calf.
Source: USMEF