May 15, 2006

US meat industry urged to focus more on exports

The US meat industry is well suited to compete internationally in supplying beef cuts made according to customer specifications, said US meat export federation (USMEF) president and CEO Philip Seng.

One third of the high quality beef exported are variety meats that have much lower value in the US market. These products include tongues, livers, stomachs and intestines.

Products such as short plate or short ribs, used in hamburgers in the US, would fetch four times the price if it had been sold in international markets.

Intestine or tripe, sold in the US for a few cents to be used as pet food, would also fetch a few dollars internationally.

The group estimates that the industry has suffered an annual loss of US$2.6 billion due to international bans on the above items.

However, strong demand at home for other beef products is helping to support prices. Still, production is increasing and continued losses may impact the industry eventually, he warned.

While locking itself out of international markets to focus on local production may be an easy solution, the consumer base and income growth would be slow, Seng said.

This inward-looking approach would prevent producers from gaining customers in countries with a fast growing population, rising incomes and an increasing demand for high quality protein.

Seng added that the beef imported into the US, is re-exported again at a higher value. For example, beef bought from Australia is sold to Japan and Korea in the form of cut-to-specification short ribs at higher prices, thus providing more impetus for the US to export abroad.