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Production costs change US meat consumption habits

 

By Ed Bedington - GlobalMeatNews

31-Jan-2013

 

The increasing cost of production is changing the face of US consumption patterns, farming leaders have highlighted.

 

Speaking at the International Production & Processing Expo in Atlanta, John Anderson, of the American Farm Bureau, said the increased costs of US meat production were meeting with consumer resistance and he expressed concern that domestic consumers were being outbid by foreign consumers as exports boomed.

 

He said the changes were being driven by escalating feed costs, and said that was having two effects. “We’ve seen a reduction in feed consumption – and that is partly down to a drive for efficiency due to higher and higher feed prices. We thought we were efficient 10 years ago, but we’re much more efficient now. However, efficiency will only get you so far.”

 

He said the other key factor behind reduced feed consumption was falling production: “In the US we’ve seen the lowest beef count since the 1960s.”

 

He said the combination of rising costs and drought was hitting hard and had been driving greater numbers of cattle to market.

 

And he added that, in production terms, both beef and pork consumption was falling, while poultry, which had been steadily rising for many years, had also flattened out. “Some of that might be down to a slowdown in export business to Russia, but cost has also played a part.”

 

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U.S. dwindling cattle herd problematic amid Japan lifting beef ban

 

MENAFN - - 1/30/2013

 

(Menafn - Greeley Tribune - McClatchy-Tribune Information Services via COMTEX) --The long-term effects of Japan lifting its limited ban on U.S. beef is welcome news, but it will put increasing pressure on beef prices.

 

In the next couple of years, that means higher costs at the grocery store while the U.S. continues to struggle with dwindling herds amid drought and high feed costs, experts say.

 

"You have supplies contracting and demand improving," said Stephen Koontz, associate professor of agricultural and resource economics at Colorado State University. "Both of those things will pull prices up."

 

Japan banned U.S. beef outright in 2003, when bovine spongiform encephalopathy, otherwise known as mad cow disease, was found in a cow in Washington state. Three years later, Japan eased those restrictions, allowing imports from U.S. cattle no older than 20 months of age.

 

Japan on Monday opted to lift that final ban, and it will take effect on Friday.

 

That's a welcome development for JBS, which operates a beefpacking plant in Greeley, but also produces beef throughout the world. The benefit of the Japanese lifting the ban is that U.S. packers will no longer have to separate cattle based on their age, and they will not have to hunt so much for cattle of the right age.

 

"Anything you can do to reduce complexities helps efficiencies," said Cameron Bruett, spokesman for JBS USA, headquartered in Greeley. "Japan is a great market. So ideally, that will provide more eligible cattle for that market. But we're still in a tough cattle supply situation."

 

He warned that the announcement is no game-changer. The U.S.. herd, by many reports, is still at its lowest level in 60 years.

 

"Anything you can do to have a rational international marketplace where there aren't barriers to trade, where there's predictably, that's a wonderful thing," Bruett said. "The challenge as an industry is building the cattle herd up."

 

Growing that herd will take a couple of years, Koontz said, as many of the females in the cattle pool have been put into the supply. Packers will have to pull them out to increase the herd, which takes time and further reduces the herd.

 

"The overriding thing that's gone on in the beef market is a progressively tighter and tighter supply," Koontz said. "We've liquidated more cows than we would have without the dry weather. And we've had the dry weather now for two years. ... That impacts the herd."

 

But still, without rain, there's not a lot of forage for the animals upon which to feed -- the crux of the problem.

 

"(Moisture) is the one and only thing that will solve that," Koontz said. "It's going to be a very tough three years to be a feedlot or a packer."

 

After two years of dry weather and dwindling herds, companies already are making tough decisions. Cargill, which operates a plant in Fort Morgan, recently opted to shut down its Plainview, Texas, plant, beginning Friday. That means roughly 2,000 employees out of work in three days. JBS also has a Texas plant, 140 miles north of Plainview, in Cactus.

 

The impact to JBS likely won't be felt as much as other packers because the company has other proteins, such as chicken and pork, to make up when other segments take dips. But beef also is a huge portion of JBS's business, Koontz said. The conversation about shuttering plants is one that all packers are having, he said.

 

Bruett said JBS isn't going to make any production decisions based on the announcement, and will take a wait-and-see approach when it comes to increasing its production. Even with the low cattle herds at present, JBS has no plans to close any plants, either, Bruett said.

 

U.S. beef is a taste that the Japanese prefer, Koontz said, given that it comes from corn-fed cattle, rather than grass-fed, as in other parts of the world. That alone will increase Japanese demand, which will pull from the supply that was supplying domestic tastes...

 

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http://www.menafn.com/menafn/7b2e303c-d8b9-4ceb-98df-68bc4cdd595a/US-dwindling-cattle-herd-problematic-amid-Japan-lifting-beef-ban?src=main