April 8, 2004

Lack Of US Beef Exports Means Extra Domestic Push

The loss of export markets for U.S. beef following the discovery of bovine spongiform encephalopathy, or mad- cow disease, in the U.S. on December 23 has made it necessary for the Cattlemen's Beef Promotion and Research Board to step up domestic promotion efforts this summer, said Monte Reese, the board's CEO.
 
Reese spoke during a teleconference from the National Cattlemen's Beef Association headquarters in Denver, Colo., Wednesday, and added that the lack of export markets also enabled the new beef promotion efforts because the CBB was able to move beef checkoff funds from stymied export efforts to the projects.
 
Summer beef radio and print advertising will be added to existing national consumer advertising and summer grilling promotions to address potential increased beef supplies caused by closed export markets for U.S. beef, said Mark Thomas, vice president of global marketing for NCBA, in the teleconference.
 
Dubbed the "Taste of America Summer Grilling Promotion," it is to feature national network radio advertising prior to the three major summer holidays - Memorial Day, Independence Day and Labor Day, Thomas said. In addition, print advertisements is set to run in grilling issues of the popular Sunday newspaper supplements, "USA Weekend" and "Parade."
 
The advertising is expected to tie into consumer desires for beef during the summer grilling season, Thomas said.
 
The NCBA is supposed to manage the campaign on behalf of the CBB and state beef councils, Thomas said. Efforts are funded by cattlemen through their $1.00-per-head beef checkoff program.
 
The added summer radio and print advertising is to supplement ongoing national television and print "Beef. It's What's For Dinner" advertising and will celebrate the anniversary of the hamburger, which was reported to have made its first public appearance at the St. Louis World's Fair in 1904.
 
During the teleconference, Dave Weaber, director of research and special projects for Cattle-Fax, a private market advisory firm, said cattle slaughter was down about 7% from year-earlier levels during the first quarter, but by March fed-cattle slaughter had recovered to near-normal levels. Declines in March's total slaughter can be attributed to dips in cow and bull slaughter, he said.
 
Cattle-Fax analysts expect 2004 total net beef supplies to range from 27.0 to 27.5 billion pounds, largely because of a lack of exports, Weaber said. This compares with 26.4 billion last year.
 
Domestic beef production is expected to be down about 900 million pounds from last year, Weaber said. However, imports of lean trimmings continue.
 
Those lean trimmings are necessary to help the U.S. move some of the fattier cuts that would have been exported by providing a way to blend down the fat content so it will move domestically, Weaber said. But the offset, because of the lack of exports, will make for bigger net beef supplies.
 
As the U.S. beef market goes through the summer, it will become increasingly important to get some of the export markets reopened to take some of the supply pressure off the market, Weaber said. Most of the supply pressure will come during the summer as the market gets into the seasonal calf-fed and yearling-fed bulge in fed-cattle supplies.
 
Last year, the U.S. exported about 2.5 billion pounds of production, or about 10% of domestic production, or about $3.8 billion worth of trade, Weaber said. It also helps utilize some cuts that the U.S. consumes in small quantities, he said.