New Exporting Opportunities

The beef industry is one of the most important industries in the United States accounting for 21 percent of the Economic Research Service’s forecasted total cash receipts of $377 billion from agricultural commodities in 2015. Beef was the most profitable agricultural industry in 2015, even standing superior to corn by $31 billion. Not only does U.S. beef stand out when talking about American commodities, the U.S. beef industry is also one of the most superior industries around the globe. With terrific quality and consistency in its products, U.Beef Export Chart 2013-2016S. beef has been listed as the most desirable beef on earth. With desire, comes demand.

Due to an increase in average incomes and a decrease in levels of absolute poverty, a larger portion of the world’s population lies in the middle of the income distribution. It is estimated that within 13 years, only 7 percent of the world’s middle class will reside in North America. Almost 70 percent of the world’s middle class will call Asia and the Pacific Region home. As the middle classes in developing countries flourish, their meat preferences change. Instead of preferring a less costly meat like chicken or pork, developing countries’ middle class consumers want beef. This screams of huge opportunity for the U.S. beef export industry.

Because you, the producer, have done your jobs so significantly well, there is a surplus of meat in the United States. Improved efficiency, advanced technologies and better practices have resulted in increased production across the nation. Not only in quantity, but also in quality. The United States raises the most nutritious and healthy carcasses while simultaneously retaining flavor, tenderness and taste. Although this is a good problem to have, the hidden challenge remains. How can we sell all of this product in our current markets and make the largest margins possible? The United States is incapable of consuming it all ourselves and 92 percent of the world’s beef demand is outside of our nation. The United States Meat Export Federation has an answer.

In an interview featured on Cattlemen to Cattlemen RFD-TV with President and CEO, Phil Seng, of the United States Meat Export Federation, Seng stated the United States is projected to stimulate 7 billion dollars in beef exports in the New Year. The United States has well established export channels with nations such as Japan, Korea, Canada and Mexico. While these markets are large and profitable, Seng says they are still developing as they progress, which will lead to higher profit margins and future successes.

Seng also spoke about the potential of U.S. Beef markets to continue to develop in other countries such as China, Central America and South Africa along with expected growth in Europe. While muscle cuts such as chuck roll or short ribs are the United States’ most profitable beef export, beef by-products, of which American’s do not usually find on their plate, also play a crucial role in beef exportation and profitability. South Africa is the second largest beef liver market in the world behind Egypt. By exporting these by-products, which would otherwise be thrown away, we are a3ble to make a profit over what was originally “waste.”

Thanks to high desirability, increased demand and specialized marketing, the U.S. beef export market adds nearly $260 to the top of every fat animal sold. What could you do with an extra $260 in your pocket?

The Wisconsin Beef Council is being proactive in establishing foreign beef markets and keeping our hard-working producers in business. In previous years, the Wisconsin Beef Council has allocated up to $20,000 in foreign marketing which helped generate an 80 percent year-on-year increase in U.S. beef sales in four different countries. This year, the Wisconsin Beef Council has allocated $40,000 to U.S. beef promotion in Central America. In addition to our contribution to the battle for shares in foreign markets, the Market Access Program run by the USDA, typically matches our allocation 100 percent, further enhancing our impact in the international markets.  The Wisconsin Beef Council is confident in and dedicated to the development of greater demand for United States’ beef in foreign markets and increase profitability for the producer.

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