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Wanted: Beef for EU specialty market
Nebraska
What does a cowboy care about international trade? If there was anything positive derived from finding bovine spongiform encephalopathy (BSE) in the U.S., it was the opportunity for cattle producers to learn that international beef trade does impact their business. Last December, when that single case of BSE was detected, U.S. beef producers witnessed the disappearance of markets for close to 10 percent of their product. That share of U.S. beef production had been going to foreign markets.
If they didn't care before, most cowboys now take a little more interest in international trade. They pay a little more attention to reports about negotiations aimed at resumption of sales to Japan, Korea and other important beef buyers. They're listening for good news that will reopen avenues to familiar foreign markets. But many of them are unaware that some less-traveled roads to international trade are already open and capable of handling more traffic.
Greg Ibach, assistant director of the Nebraska Department of Agriculture, says demand for U.S. beef is growing among the 15 countries comprising the European Union (EU). Ibach recently talked about international trade while addressing cattlemen gathered for the "Open House" at the University of Nebraska Gudmundsen Sandhills Laboratory, near Whitman. While explaining the Department's beef promotion efforts, he called the EU a market that currently is underserved.
There is a catch, Ibach admits, since the EU admits only non-hormone beef. For years, protectionist European nations have balked at allowing market access to U.S. beef and effectively banned imports of beef from cattle that were raised with the use of hormones or hormone-like growth promotants. However, the EU now accepts U.S. beef that can be certified as hormone-free. And several Nebraska producers are seeking that market, but there is room for more.
According to Ibach, certified non-hormone beef must be produced by approved operations that meet specific requirements. Only 13 farm or ranch operations in the U.S. are approved, and seven of those are located in Nebraska. Only two U.S. beef packers are certified for processing non-hormone beef for export to the EU. Both of those, Greater Omaha Packing Company and J.F. O'Neill Packing Company, are located in Omaha.
Greater Omaha Packing Company has been an active participant in beef promotional activities spearheaded by the Nebraska Department of Agriculture. The Department's Ag Promotion Division promotes the attributes of Nebraska agricultural products and beef has been emphasized during efforts to develop international markets. Along with Greater Omaha Packing Company, MetaFoods (a meat exporting firm) and the Nebraska Beef Council have partnered with the Department to promote beef in Europe.
They created a stir at the Anuga Food Show in Cologne, Germany. Based on the success at Anuga, which is the largest food show in Europe, the Department is planning another promotion this year, at a major food show event in Paris, France.
"We don't just promote the best cuts of beef. Instead, we focus on under-utilized cuts, and particularly those cuts identified by the muscle profiling study," explains Ibach.
The University of Nebraska played a major role in that beef research study which was supported by beef producers, through their dollar-per-head checkoff. The results led to new uses for previously under-utilized beef cuts that add value to the total beef carcass. The classic example is the Flat Iron steak which has become widely popular in foodservice and on restaurant menus. Ibach says European meat purveyors are impressed with the quality and versatility of U.S. beef. They want to know how to get it.
"The supply (of non-hormone U.S. beef) doesn't come close to meeting the demand," states Ibach. "Representatives of Greater Omaha estimate demand to be 100 times greater than the current supply."
While growth of this market presents opportunity, Ibach warns that access isn't easy. Like participants in growing numbers of domestic branded beef programs, suppliers to the EU market must be certified. Stringent record keeping is required for source-verification, individual animal identification and documentation of production practices. Certified producers are subject to periodic inspections and audits of their records.
Ibach says Ag Promotion and Development Division staffer Royce Schaneman currently advises interested producers regarding certification requirements and alignment with approved feedlots. According to Schaneman, the costs associated with managing cattle to meet EU market requirements may add $20 per head to total production costs. And producers should consider the cost of lower animal performance since no growth-promoting implants may be used. However, the EU market does offer carcass premiums of $10 to $15 per hundredweight.
"There is money to be made," offers Schaneman. "And there is nothing magical about gaining certification. Producers have to follow certain procedures, maintain positive animal identification and document how cattle are handled. Everything has to be written down so it may mean more record keeping. But for some producers, it's not much different from what they're already keeping."
Compared to mainstream beef exports, the EU non-hormone market is small. But it holds opportunity for producers interested in serving buyers that hunger for a specialty product. For more information about cattle and beef marketing opportunities, contact Royce Schaneman at the Nebraska Department of Agriculture, Ag Promotion and Development Division, Lincoln, Nebraska, 402-471-2341.
Date: 9/23/04
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