Beef Variety Meat Exports Performing Well in Key Markets, but More Destinations Needed

Beef variety meat exports make an important contribution to the profitability of U.S. cattle producers by enhancing the “drop credit” – the price received for items other than muscle cuts. Dan Halstrom, U.S. Meat Export Federation (USMEF) senior vice president for global marketing, explains that the drop credit has been under pressure in recent years, due in part to Russia closing to U.S. beef in 2013. But beef variety meat exports have picked up this year, thanks in part to strong demand for beef tongues in Japan and larger shipments of feet and oxtail to South Korea.

Beef liver exports to Egypt have increased by 14 percent in volume in 2016, but export value has declined. To help reverse this trend, Halstrom says it is important to find a wider range of destinations for beef livers, so USMEF is working to build demand in markets such as Peru, Angola and South Africa.


TRANSCRIPT:

Joe Schuele: In this U.S. Meat Export Federation report, USMEF Senior Vice President for Global Marketing Dan Halstrom talks about the important contribution beef variety meat exports make to U.S. cattle producers, enhancing the so-called drop credit.

Dan Halstrom: The drop credit has been under pressure the last several years. One big reason would be lack of access to Russia three years ago, which was a very big beef liver market, so what we’re focused on is trying to impact that demand curve for the beef variety meat. Japan is a good example. We’ve had a lot of success this year in Japan, especially with the beef tongues. The volume on exports is up about 20 percent compared to last year. South Korea is another good example. We have beef feet, ox tails – a very big market in Korea and we’ve seen more volume in the first three months of this year than we did in the first half of last year into Korea, so this is exciting, as well. If you add a few of these together it impacts the drop credit dramatically.

Joe Schuele: Beef liver exports are also strong this year, but Halstrom explains that USMEF has worked to find more destinations for livers.

Dan Halstrom: One of the mainstays for beef livers, traditionally, has been Egypt. Egypt continues to be a very important market for us – our exports into Egypt this year are up about 14 percent for the year. But I would say we are a little bit exposed there because we have so much of our variety meat business going into one market, so one of the things, besides trying to continue to develop Egypt, we’re trying to develop new markets for these variety meats – markets like Peru, markets lie Angola in South Africa. We just regained access there from the 2003 BSE incident. So South Africa would be a brand new market that the U.S. hasn’t had the opportunity to send variety meats there, and it’s definitely a destination for beef livers. Trying to build up that demand in some of these smaller emerging markets is a key strategy of ours.

Joe Schuele: For more on this and other trade issues, please visit USMEF.org. For the U.S. Meat Export Federation, I’m Joe Schuele.