By Amy Bickel
Where’s the beef? — For U.S. cattle producers, it’s not in Japan.
Meanwhile, limited exports, a softer domestic demand and drought mean more cattle fattening in the nation’s feedlots – causing a glut of product-depressing prices.
Cattle on feed May 1 in Kansas totaled 2.53 million head – up 12 percent from last year, according to the Kansas Agriculture Statistics Service. April’s count of 2.59 million was the highest in the state for any month since 1996.
Unfortunately, profit potential is running in the opposite direction. Live cattle prices last week hovered near $78 per hundredweight – about $12 below prices during the same period last year, according to Kansas State University.
Drought ranks high on the list of reasons for the bearish outlook, Larned cow/calf producer David Cross said.
Hot temperatures and winds dried out ponds and scorched the grasslands, he said. Those poor conditions in the Midwest, including Texas and Oklahoma, have sent more cattle to slaughterhouses and local sale barns. “The drought is the major concern,” he said.
Also, fewer people feast on fad diets like the Adkin’s protein craze. And the retreat of top beef importers Japan and Korea because of mad cow disease also pains producers’ pocketbooks.
Those countries have banned U.S. beef since the first case of bovine spongiform encephalopathy in December 2003. Japan resumed trade briefly last December, which halted Jan. 20 after Japanese inspectors discovered banned cattle parts in U.S. veal.
Talks continue with Japan, and exports to Korea, valued at $877 million in 2003, could resume as early as next month.
“Exports being shut off is having a negative effect,” said Todd Domer with the Kansas Livestock Association. “If Japan would open, it would take care of some of the problem.”
Exports to Japan in 2003 – then the nation’s top beef buyer – totaled $1.4 billion, said Lynn Heinze, U.S. Meat Export Federation spokesman.
He said experts predict that in coming years, the United States will produce 3 billion pounds of additional beef over the average annual production.
“We need to export two billion of that,” Heinze said.
Two years ago, Andrew Murphy led a Japanese consul general and Gov. Kathleen Sebelius through Great Bend Feeding, toting the safety measures regarding mad cow disease.
He didn’t figure it would be this long before trade resumed, he said.
Japan imports a lot of variety meats, like tongue and tripe, Murphy said, which gives those products added value and a market that isn’t recognized domestically.
According to the U.S. Meat Export Federation, the industry is losing $26 per head without the ability to export liver, intestine, tongue and tripe to most markets.
“It is all those little things that add up – things that we don’t think about typically,” Murphy said.
Cross, the Kansas Livestock Association’s president-elect, said Japan’s continued ban was political.
“The U.S. knows the beef is safe, Japan knows U.S. beef is safe,” he said. “I think the whole world knows we have safe beef.”
Source: The Hutchinson News