Beef exports and imports are certainly a
challenging topic to tackle for American cattle farmers and ranchers, but they
are an integral part of our beef industry here in the United States.
At first glance, the idea of importing foreign beef into
the U.S. may strike cattlemen and women here as a curious practice. If we grow
arguably the best beef in the world in this country, why bring in more? The
reason lies in the types of beef we Americans love to eat – mainly steaks and
ground beef. In fact, CattleFax estimates that over 51% of the beef consumed in
the United States is ground beef.
Steaks are high-demand, high-value cuts, and consumers
are willing to pay higher prices for them. This is great because it brings more
value to the cutout. However, American consumers also love hamburgers, and most
of those hamburgers are consumed at fast food restaurants at low prices. Since
American farmers and ranchers are producing more Prime- and Choice-graded beef
these days, the value of the non-steak cuts, due to global demand, is higher
than the value of hamburger. So, rather than grind them into burgers, we can
export them for a premium.
However, in order to meet that domestic demand for
inexpensive, fast food hamburgers, we need to import beef. Despite what you
might visualize imported beef to be, most of the beef we bring into the U.S. is
lean trim, not muscle cuts for sale at retail. In conversations I’ve had with
industry experts, most estimate that at least 90% of our imports are
inexpensive lean trim or manufacturing beef that is then ground with fat
(something we produce but consumers don’t buy outright) from our corn-fed
animals to produce all those fast food hamburgers at cheap prices for hungry
American consumers.
At the same time, we export other beef cuts (which could
have been ground) and variety meats (which we don’t like to eat here) to other
markets around the world. Those markets have a high demand for those cuts, so
we can then receive top dollar back for those items. For example, short
plate could be ground and get about $1.50 per pound here, but because it’s a
high-demand item in Japan, they will pay double that price per pound. Assuming
each short plate weighs 15 pounds, the United States Meat Export Federation
(USMEF) estimates that one item is adding about $22.50 of value per head.
Tongues are another great example. No one I know around here grills them
up on the weekend! Demand for those is low, only fetching about $1.00 per pound
here in the United States. But in Japan, every person I know loves to grill
tongue, so they pay more than $5.50 per pound there. That adds another $13.00
per head.
This happens with other cuts in other countries as well,
helping to add value – especially to low-demand items in the U.S. According to
CattleFax, the amount of beef we imported compared to the amount of beef we
exported last year is expected to be about the same (final 2019 figures will be
released in February). However, and this is very key, the value of our exported
beef is estimated to be about $1.3 billion higher.
In a nutshell, we are meeting the desires of consumers
with the beef they want to purchase, wherever they are in the world. The global
competition for these cuts helps us get the best prices possible and boosts
demand for our cattle.
Next time, we’ll discuss the role the Beef Checkoff
plays in imports and exports.
