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Study Finds Beef Exports Produce Added Value

RENO — While USDA estimates that about 9% of U.S. beef production is exported, a new study reported here indicates that 55% of beef variety meats are exported at incrementally much higher values than if sold in the U.S. In addition, higher international prices paid for beef cuts underutilized in this country contributed more than half of the added value resulting from access to international markets.

The study, reported by U.S. Meat Export Federation (USMEF) Technical Services Vice President Paul Clayton during the Beef Industry Research and Technical Services Update session in Reno Wednesday, July 17, 2002, found that exporting beef and beef variety meats accomplished three things: (1) it raised the number of potential customers and resulting aggregate demand; (2) it increased the value of U.S. products by allowing sellers to find buyers willing to pay the highest price globally, not just domestically; and (3) the total value of exports amounted to the equivalent of $12.45 per hundredweight on fed steers.

The study collected data through USMEF's worldwide network and compiled this data with methodology reviewed and approved by Denver-based CF Resources. The study set out to rank the Top 10 U.S. beef export items to 12 major markets, then determine and verify, through a number of independent databases, the volumes and values provided by USMEF international staff. The study was funded by state beef councils with beef checkoff dollars.

"While the domestic value of variety meats is very low and so the extra value from exporting these items disproportionately high, variety meats only accounted for 40% of the $1.2 billion of extra value [added through exports]," the study notes. "The additional value of exporting underutilized items from the carcass, such as short ribs and short plate, accounted for 60% [of the added value].

"If every consumer in the world had the same preferences and tastes for beef," the study adds, "then the price of beef would only differ across markets by the amount of transportation and transfer costs. If this were the case, then the only benefit of exporting would be to remove supply from the domestic market and apply upward pressure on prices through the supply response." But the study found a large difference in the values of many items (see table for Top 10 List and comparative values at http://www.usmef.org/Misc_News/02_VOB_Table.pdf ) depending on whether or not they could be sold on the international market.

For example, tongue has virtually no demand in the domestic market and would be sold to dog food manufacturers for about 22 cents per kilogram (kg). Internationally, the prices averaged $9.92/kg and more than 35,000 metric tons were exported. The added value for this one product alone amounted to more than $328 million.

"In short, access to the export market benefits the U.S. beef industry by increasing the number of consumers, an increase in aggregate demand, and by adding consumers who complement U.S. demand by paying higher prices for certain underutilized parts of the beef animal," the study concludes.

In 2001, according to revised USDA statistics, total U.S. beef exports declined in volume by .4% to 1.274 million metric tons, while value declined by 5.7% to $ 3.406 billion. Higher U.S. beef prices and a strong U.S. dollar helped push export volumes slightly lower for the first time in more than 10 years. The study estimates that exports now account for nearly 13.4% of U.S. beef production on a wholesale weight basis, and 18% of total value, when the variety meat exports are included in the calculations.

Clayton's presentation is available online at http://www.usmef.org/TradeLibrary/Archives/Speeches/Speech02_0717_Clayton_ValueBeefExports.htm. The study, "Methodology and Results of the Value of Beef Exports Analysis," is available online at http://www.usmef.org/Misc_News/02_BeefValueMethodoloy.pdf

AI Strategies To Be Focus Of Beef Cattle Workshop

MANHATTAN, Kan. — Successful artificial insemination [AI] programs come from proper application of current technology, said Sandy Johnson, Kansas State University Research and Extension livestock production specialist in Colby.

Veterinarians, producers and others involved with artificial insemination and estrous synchronization can learn about the latest techniques at the Applied Reproductive Strategies in Beef Cattle Workshop, Sept. 5-6, 2002 at the Holiday Inn in Manhattan.

The workshop is coordinated by the North Central Region Bovine Reproductive Task Force and Kansas State University College of Veterinary Medicine. It's designed to improve the understanding of the physiological processes of the estrous cycle, current procedures to synchronize estrus and ovulation, and the proper application of these systems, Johnson said.

The program will also address methods to assess male fertility and how it affects the success of AI programs.

More information and registration is online at http://www.vet.ksu.edu/depts/itc/conted/beef.htm or contact Johnson at skjohnso@oznet.ksu.edu or (785) 462-6281.

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