High-value Beef May be Best U.S. Niche
U.S. beef producers may find the best future bang for their buck is to concentrate on producing high-value, top-quality meat for home and abroad. As part of a recent webinar series on minimizing feeding costs, Ohio State University ruminant nutrition professor Francis Fluharty told producers that to know what they must produce, they must understand consumer demand.
“What is our role? The U.S. needs to be the high-value producer. We are not the biggest kid on the block, but we have the highest quality,” he says. “There will be 400 megacities by 2050, mostly in Asia, compared with two megacities in 1950. We are adding 51 million middle-class consumers per year, primarily in Asia, and they have an interest in high-quality beef.”
Per capita beef consumption currently is highest in Uruguay, followed by Argentina, Brazil and the United States. Top-value beef markets are Japan, Hong Kong, Canada, Mexico and South Korea.
“We only export about 25% of our middle-meat cuts. End meats are the rest of the volume, and consumers in these countries want fat and flavor,” he says. “Big packers allow for this export market to succeed and add hundreds of dollars to cattle prices because they are able to ship not only all of the demanded cuts, but also the byproducts worldwide.”
Yet, as demand rises, U.S. beef inventory is at its lowest level in 50 years. Fluharty says cow herds are shrinking in the Midwest, Southeast and Southwest and expanding in the Upper Plains and Northwest. As U.S. inventory declines, the Brazilian cattle herd is growing. Brazil is the second-largest producer with 190 million head, compared with 92 million head in the United States.
“Brazil has several cow herds with more than 20,000 head. They are looking at better fertility and are adding Angus and other English breeds into their mix,” says Fluharty. “Where row crops occur, livestock production follows in Brazil. Both will increase over the next decade.”
While domestic consumers will continue to buy beef for flavor, Fluharty says U.S. consumers are very price-conscious.
“Consumers expect palatability and tenderness, and that drives consumer satisfaction. In addition, the beef industry has expanded to offer all kinds of choices, from natural to all grass-fed and more,” he says. “We better listen to our consumers because some element of health and wellness is important to three-quarters of American shoppers.”
Fluharty notes that U.S. families with a female head of household 50 years old or older are most likely to purchase branded meat products. Households in the West are more likely to purchase branded meat than in the East.
“Consumers are beginning to look for 100% traceability. Niche markets exist because we have a safe beef supply, good feeding and management technologies and a packing system that makes money selling byproducts overseas,” he says.
Editor’s Note: A former National Junior Angus Board member, Barb Baylor Anderson is a freelancer from Edwardsville, Ill.