Beef Trade is on the Table

By Megan Webb, Ph.D., Contributing Editor

As agriculturalists, we are submerged in annual traditions and labor-rich experiences. For you, these experiences may include weaning, branding, having a successful hay season or harvest! Whatever your operational traditions are, seek to enjoy them through the triumphs and tribulations, and celebrate your successes no matter how small. As philosopher John Ruskin said, “The highest reward for a person’s toil is not what they get for it, but what they become by it.”

As summer comes to an end and we prepare to celebrate Labor Day, let us not forget our annual achievements and contributions to our great country. Despite ongoing drought, shrinking of the herd, beef processing instability, litigation and foreign trade concerns, U.S. cattlemen and women remain the backbone of the beef community and its positive push forward.

As we look ahead into 2022, some may be feeling dreary as we are faced with higher feed prices, and limited forage and grass from stricken drought conditions. Remember, through these challenges you aren’t alone, and deploying flexible management strategies to overcome these obstacles can result in reward after the storm. Considering other feed resources such as byproduct supplementation, early weaning or overhead reductions may be favorable.

In reflection of potential supply limitations, beef retail prices are predicted to increase in 2022. Not only is this increase from domestic demand but also from the demand among international beef markets. After the recent cybersecurity attacks on the beef processing industry, on top of supply chain disruption during the pandemic and more limited supplies globally, international trade is a major discussion point on the table.

Trade Turbulence

Regardless of the drought, herd expansion will still be called for as both domestic and international beef demand remains strong. International beef trade is a vital aspect of the U.S. agricultural economy. Beef exports resulted in $286.38 per head of fed cattle slaughtered in 2017, and trade continues to add value to live cattle prices today. The U.S. beef exports are anticipated to increase to China on top of already being the third largest export market for the United States in 2021. The continued demand from China is likely brought on not only from China’s struggle with African Swine Fever starting in 2018 but also from trade limitations Argentina experienced. In July, Argentina banned beef exports to China for 30 days due to domestic inflation of beef prices. This gap in exports permitted the U.S. to pursue greater export opportunity to China and Hong Kong, and will likely lead to more robust U.S. beef export growth and international sales of U.S. beef.

For the U.S. to continue to benefit from beef exports, renewal is needed for the Trade Promotion Authority or TPA to permit international free trade negotiations such as the continuation of the U.S.-Canada-Mexico Agreement (USMCA). In July, the USMCA recognized a 1-year anniversary, which helped to expand access, increase exports and create a more level playing field for cattle producers. Continued success in global markets is dependent upon upholding USMCA and ensuring future trade agreements work. Considerable cooperation and commitment between the new administration and Congress will be needed to properly prepare another TPA to benefit the U.S. beef industry.

Transparency Sought for Beef Labeled ‘Product of the USA’

You may have heard the phrase, “The customer is always right.” Consumers deserve to know where their beef comes from, even if beef is from a foreign country. Currently the “Product of the USA” claim can appear on meat that was raised in another country. I’m excited that the U.S. Department of Agriculture (USDA) is working to ensure consumers are not confused about the origin of their food or its safety. I believe accurate labels are important to convey information about how and where beef products were raised.

According to the National Cattlemen’s Beef Association (NCBA), the challenge with the “Product of the USA” label is that it is not subject to source verification nor tied to any food safety standards, and is applied by packers and retailers that may not derive value back to cattle producers. NCBA desires to work with USDA’s Agriculture Marketing Service to promote generic labeling such as,
“Processed in the USA” and provide more educational awareness of marketing claims that can benefit producers, processors and retailers to permit a voluntary option to verify product origin.

U.S. beef continues to have an ever-increasing international presence among competing countries in recent years. Emerging markets permit U.S. beef industry expansion opportunities to diversify retail beef and offal product sales. To continue international success, it will be important for the United States to seek reliable trade agreements and improve label transparency. During the trade turbulence and challenging environmental conditions, remember that weathering a dreary storm can lead to greener pastures. Learning from others who have navigated through drought and similar triumphs will provide a compass.

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