Demand keeps prices up, economist reports

Missouri

A University of Missouri livestock economist urged beef producers to not let up on producing the quality, quantity and safety of product wanted by U.S. consumers.

"Consumer demand is the number-one driving force in the U.S. beef market," said Scott Brown, with MU Food and Policy Research Institute (FAPRI.)

"Increased trade, especially with Japan, South Korea, and Mexico, will be important," Brown said. "Keeping U.S. customers satisfied is your main job."

In 2003, the Japanese market for U.S. beef was shut down after discovery of a case of bovine spongiform encephalopathy in Washington state. "That put an extra 4 million pounds of beef a year on the market for us to eat," Brown said. "We did it, and at an increased price."

Brown called the 2004 beef market year "absolutely phenomenal."

Feeder calves averaged $1.12 for the year while market steers averaged 85 cents per pound at slaughter.

In his outlook, Brown does not expect prices to be as high in 2005. FAPRI projects average prices for the year for feeder calves at $1.06 and market cattle at 83 cents per pound.

"After the BSE cow was discovered, beef producers were asking if they would even be able to sell their cattle at all," Brown said.

He spoke at a FAPRI outlook conference during a "farmer appreciation dinner" at the Johnson County fairgrounds sponsored by radio station KMZU and area businesses.

The one case of BSE in the United States was found to have come from a Canadian herd, which is where other BSE cases have also been discovered. The import of live animals from Canada has been shut down for more than a year and a half.

However, the U.S. Department of Agriculture has announced "final rules" for the reopening of the border on March 7 to limited import of young live animals from Canada. Animals under 30 months of age are not known to contract the disease. Under the new rules, Canadian calves would go directly to slaughter, or would be kept together in a feedlot before being slaughtered.

Questions from farmers at the end of the session indicated they did not favor reopening the borders to cattle imports. Some questioned the continued import of feeder calves from Mexico into U.S feedlots.

Brown pointed out that trade with Mexico under NAFTA (North American Free Trade Agreement) has been beneficial to U.S. producers. "Remember, they have taken over a half-billion pounds of our beef that we could not export to Japan."

Brown said increased trade with Mexico has helped raise the standard of living there. As incomes increase, consumers buy more beef for dinner.

"The overall impact of NAFTA on the U.S. beef industry is positive," Brown said.

Brown reminded producers that international trade is a two-way street. "If we want Japan to import our beef, we must be willing to open our borders to imports as well.

"We may have to take the first step if we want to restore trade.

"Japan has taken a very strict stand on their import requirements, but Japanese consumers do want our beef," Brown said. "There is no other country in the world that can supply the quality of beef that you produce."

Date: 1/27/05

	Web hpj.com

Copyright/Privacy
Copyright 1995-2008.  High Plains Publishers, Inc.  All rights reserved.  Any republishing of these pages, including electronic reproduction of the editorial archives or classified advertising, is strictly prohibited. If you have questions or comments you can reach us at High Plains Journal 1500 E. Wyatt Earp Blvd., P.O. Box 760, Dodge City, KS 67801 or call 1-800-452-7171. Email: webmaster@hpj.com