September 9, 2010

US beef sees growth potential in Middle East

Middle East offers a good market for US beef than Russia and EU with wealth created by booming oil exports and market share made available by a relative lack of competing suppliers, says John Brook, a US Meat Export Federation officer.

"Based just on raw statistics, the region showing the most [upside] is the Middle East," Brook said Wednesday (Sept 8).

The Middle East is now importing in excess of 80,000 tonnes of US beef per year, the bulk of it to Egypt where the large but relatively poor population seeks out variety meats, primarily livers sold at basic street markets. But Egypt also afforded the fastest growth this year for muscle cuts that found their way to luxury hotels and restaurants.

Other Middle Eastern markets, such as Saudi Arabia and the United Arab Emirates, are trading up to higher-quality product at modern supermarkets, the likes of US-based restaurant chains including Ruby Tuesday's, steakhouses and, at the highest end of the spectrum, to seven-star hotels in Dubai.

Increased oil prices over the last two years has spurred more spending. Another positive factor is there are relatively few suppliers of high-quality meat.

"Australia and Argentina are competing well-I mean, Australia leads in muscle cuts-but there is more than enough space for [US exporters] to develop their business," Brook said.

Volumes in the Middle East outpace those in Europe (10,000 tonnes) and Russia (more than 30,000 tonnes), but the EU is the best value market due to the premiums importers pay for US beef.

Brook envisions contracts with EU importers to guarantee premiums to US cattle producers in order to incentivize more participation in non-hormone-treated beef programs. Otherwise, a US traceability system would go a long way to expanding exports to Europe and other regions, he said.

"It's something that staggers me, for a country like the United States which gets such good value from exports to Japan, Asia, Mexico and EU, that the US, is not just dragging its feet on traceability but now has appeared to take a step back with the dropping of [National Animal Identification System] scheme," he said.