030157 Beef Industry Faces Serious Challenges

Kansas City - U.S. beef trade over the next few years faces some serious challenges as core markets shrink and competition from other meats makes marketing more difficult, said Lee Schatz, deputy director of the Livestock, Dairy and Poultry division of the U.S. Department of Agriculture's Foreign Agricultural Service.

Schatz was speaking to a gathering of R-CALF United Stockgrowers of America members at the fourth annual convention of the cattlemen's organization here Thursday.

The USDA forecast global beef trade would reach record levels in 2002 and 2003, with this year totaling about 6.5 million metric tons.

U.S. beef imports are a large and long-term portion of international beef trade, Schatz said. The USDA estimated the U.S. will account for 23% of the total trade, up from 19% in 1990.

But while the U.S.'s beef imports have grown, total world imports haven't changed much, he said. In 2001, the last year complete records are available, world trade amounted to about 5.8 million tons, up only slightly from the 5.7 million traded in 1991. The slices of the pie have just changed.

U.S. imports rose to 1.435 million tons from 1.091 million over the period, Schatz said. Japan's imports rose to 955,000 tons from 508,000, and Mexico and Canada soaked up a combined 725,000 tons in 2001, compared with only 337,000 just 10 years earlier.

During that same period, Russia's beef imports declined to 653,000 tons from 1.035 million, Schatz said. In addition, imports by countries outside of the core 10 shrunk to 1.117 million tons from 1.931 million.

For 2003, the USDA expects the percentages of total world beef imports to remain roughly the same as in 2001 while the market expands to 6.5 million tons from 5.8 million, he said.

By contrast, world broiler imports more than doubled over the 1991-2001 period, rising by 125%, Schatz said. Russian imports rose significantly while the European Union's dropped sharply. There was also growth in other markets outside the core importing countries.

Japan's beef consumption after the discovery of bovine spongiform encephalopathy, or mad cow disease, is struggling back toward 1995 levels, Schatz said. There has been nearly a full recovery in frozen beef products but fresh markets have only recovered to about two-thirds of the previous level.

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