'Plenty of room' for US, NZ beef

 

Demand impact may curb benefits of $A fall

 

Fewer cattle on feed – Aus.

 

Cow prices remain at record levels

 

Some secrecy needed in trade talks: Ron Kirk

 

Antidumping duties would raise chicken prices 22.4% in Mexico, study finds

 

New report provides a decade of foodborne illness analysis

 

BPI to eliminate dozens of corporate jobs

 

'Plenty of room' for US, NZ beef

Manawatu Standard

JILL GALLOWAY

15/05/2012

 

A beef cattle number cruncher from the United States says world growth means there will be plenty of markets for US and New Zealand beef around the world.

 

Cattle-Fax chief executive Randy Blach was in New Zealand to talk to farmers about US beef trends and the impact on New Zealand.

 

His company provides member cattle producers with market information, analysis and research. He is a cattle farmer himself, with a family farm in Colorado.

 

Mr Blach said international markets were linked, so the impact of beef in the US had a direct impact on prices New Zealand farmers could get. "The US is the largest beef producer in the world and one of the largest beef exporters as well. Over the next three to four years, beef cow numbers are building again in the US as droughts subside in most areas."

 

He said that as numbers built in the US again, one of the first impacts of that was the US would need more lean beef to supply its own market.

 

"We've got about 40 million cows in the US at the moment. Of those 30 million are beef cows, 10 million are dairy cows."

 

He doubted the one case of bovine spongiform encephalopathy (BSE or mad cow disease) would make any difference to the major US export markets.

 

"It was an atypical case in an almost 11-year-old dairy cow. It was identified and euthanased on-farm. It was one of those rare things that happen. The animal did not contract the disease through feed contamination."

 

He saw an opportunity with the growing world demand for animal protein that beef farmers in New Zealand needed to be aware of. "The global market is expanding rapidly. We've had growing incomes in many developing markets. The beef, pork, poultry and venison demand means there are tremendous opportunities."

 

Mr Blach said this meant the New Zealand and US beef markets need not be at loggerheads.

 

"The US is exporting to 130 countries. I know New Zealand is shipping to many of those same markets. But we need to keep our eye on the target. The world population is expected to grow by 750 million over the next 10 years."

 

 

Demand impact may curb benefits of $A fall

Beef Central

By James Nason

15 May 2012

 

The Australian dollar has fallen back below parity with the US dollar for the first time in 2012, based on mounting fears that Greece is preparing to default on its debt by exiting the euro zone and the potential impact of softer Chinese growth on Australia’s economy.

 

The news has been greeted as a positive development for Australia’s export beef industry, which has lost ground in key export markets to more competitively priced US beef exports since the $A moved above parity with the $US in early 2011.

 

If sustained, a below-parity dollar should help to improve the price competitiveness of Australian beef in major export markets such as Japan and Korea.

 

However, when falls in the dollar are associated with downturns in economic activity and demand, as appears to be the case in this instance, the benefits may not be as significant as Australian beef industry stakeholders might hope.

 

MLA chief economist Tim McRae points out that while Australia’s beef industry would rather have an $A at US99c than US105c or higher, the softer economic factors that are driving the dollar down are also likely to pull overall beef demand down.

 

“You take a step forward and on the other side you take a step back,” Mr McRae said.

 

“Ideally we would love to see the $A decline on a strengthening US dollar and positive economic signals overseas, but I think this one is just associated with more problems in Europe and the Australian economy showing a few signs of slowing.

 

“It is nice to see the dollar under parity, but we would love to see a demand response with it, which would really accentuate the benefits.”

 

With uncertainty dominating economic news, importers were likely to sit back and wait until they saw a tangible improvement in demand before increasing orders, regardless of where the $A was trading, Mr McRae said.

 

Westpac senior manager, agribusiness, Nigel Stewart said a lower Australian dollar was important for Australian beef producers and exporters.

 

“As Zanda MacDonald said at the Westpac beef breakfast (at Beef 2012 last Wednesday), a parity AUD v USD would go a long way to boosting profit margins versus the last 12 months,” Mr Stewart said.

 

“Beef exports should see some relief at least in the short term as a result of this.”

 

Mr Stewart said there were numerous financial market strategies that exporters could use to lock-in rates for a period of time to take advantage of favourable movements in the AUD. This took out some of the variability in foreign exchange and allowed clients to predict future profit and loss movements more accurately.

 

 

Fewer cattle on feed – Aus.

ABC Rural

By Amy McCosker

Tuesday, 15/05/2012

 

The number of cattle on feed in Australia dropped 5 per cent in the first three months of this year.

 

The figures come from the latest Australian Lot Feeders Association and Meat and Livestock Australia monthly survey.

 

MLA's Tim McRae has attributed to fall to the high Australian dollar and a turn towards pasture-finished cattle.

 

"Really, it was a result that we expected to see given that you've got a lot of area of eastern Australia, particularly in Queensland, that is flush with pasture and plenty of water," he said.

 

"Combine that with a dollar at parity, which is still uncomfortable for a lot of people in the industry, and put that on top of a Japan and Korea market that is very sluggish at the moment."

 

Australian Agricultural Company (AAco) runs two feedlots, Goonoo in central Queensland and Aronui near Dalby in southern Queensland.

 

 

Cow prices remain at record levels

Drovers CattleNetwork news source

May 15, 2012

Source: Tim Petry, Livestock Economist, North Dakota State University Extension Service

 

Cull cow prices were record high in 2011 and are on pace to set another record high in 2012. Prices for 85-90% lean slaughter cows in the Southern Plains started 2012 at $70 per hundredweight (cwt.) and increased seasonally throughout January and February. Since late February, prices have traded in a fairly narrow trading range of $85 to $87/cwt., and have averaged about $10 higher than last year. High prices in 2011 were in spite of relatively large cow slaughter, particularly in the last half of the year. Beef cow slaughter in 2011 was 15% higher than the previous 5-year average, and was caused largely by severe, and in some cases record setting drought in the Southern Plains. But cow prices were buoyed by strong demand for manufacturing grade cow beef and lower beef imports.

 

Higher cow prices in 2012 are the result of lower cow slaughter and continued strong demand for 90% lean boneless beef, despite the lean fine textured beef (LFTB) controversy and discovery of another U.S. cow with BSE.

 

For the year, total cow slaughter has been down about 1.5%. However, declines in recent weeks have been higher with April cow slaughter reported down 8.7%. All the decline in cow slaughter has come from the beef cow sector, with beef cow slaughter down about 2.5% for the year compared to dairy cow slaughter up almost 1%. In April, beef cow slaughter was down 18.5% with dairy cow slaughter up about 3%.

 

Reduced cow slaughter for the rest of the year would be supportive to prices. What are the prospects for that?

 

Dairy cow slaughter may remain above last year’s levels for several months as increased milk production is pressuring prices. Beef cow slaughter levels will be dependent on rainfall in key cattle producing regions. U.S. pasture and range conditions recently reported by USDA-NASS and compiled by LMIC indicated 17% of pastures and ranges in poor and very poor condition compared to 24% last year at this time and the five year average of 17.6%.

 

The most improved region is the Southern Plains where 27.5% of pasture and range was reported as poor and very poor compared to 63% last year and a 5-year average of 24.4%. By mid-summer last year, severe drought caused a 95% poor and very poor rating in the Southern Plains. Both the Southeast and Western regions now have worse ratings than last year and conditions there will need to be watched closely.

 

 

Some secrecy needed in trade talks: Ron Kirk

Drovers CattleNetwork

Doug Palmer, Reuters

May 14, 2012

 

The United States is being as open as possible about international negotiations to create a nine-nation free trade agreement in the Asia-Pacific region but has to maintain some secrecy in the talks, the top U.S. trade official said.

 

"I believe ... that we have very faithfully operated within the spirit of the Obama administration to have the most engaged and transparent process as we possibly could," U.S. Trade Representative Ron Kirk said in an interview from Dallas, where the United States is hosting the 12th round of negotiations this week on the proposed Trans-Pacific Partnership (TPP) pact.

 

"But there's a practical reason, for our ability both to preserve negotiating strength and to encourage our partners to be willing to put issues on the table they may not otherwise, that we have to preserve some measure of discretion and confidentiality," Kirk said.

 

Critics such as consumer advocacy group Public Citizen's Global Trade Watch have called for a more open process because of their concern the pact could restrict Internet freedoms in order to fight digital piracy, reduce access to life-saving medicines by extending drug patent protections, and encourage U.S. companies to move more jobs overseas through the agreement's investment protection provisions.

 

They have pressed for countries to release a draft text of the TPP to allow more public input.

 

Kirk, in an interview with Reuters on Friday, said it was still too early in the negotiations to do that. But "there will be a time, once we have agreed on text, that we may - as we have with other agreements - be able to release that," he said.

 

"There's always that tension between when you release and not," Kirk said, noting that about a decade ago negotiators released the draft text of the proposed Free Trade Area of the Americas and were subsequently unable to reach a final agreement.

 

The United States, Australia, New Zealand, Chile, Peru, Singapore, Vietnam, Malaysia and Brunei hope to wrap up negotiations on the wide-ranging TPP trade agreement by the end of the year.

 

The countries are aiming for a "21st-Century agreement" that will go further than previous pacts in tearing down barriers to trade and raising international standards in areas like workers right, environmental protection and intellectual property rights rules.

 

They also want an agreement that will be open for other countries, including potentially even China, to join.

 

STATE-OWNED ENTERPRISES

 

Kirk, a former Dallas mayor, said he has spoken with Public Citizen and other critics of the agreement and will continue to weigh their priorities against those of the business community, which view the pact as an opportunity to grow their companies by developing stronger ties between the United States and the world's fast-growing region.

 

The United States has tried to be as open as possible about its goals for the agreement while maintaining the secrecy that is needed for countries to thrash out agreement on sensitive issues, Kirk said.

 

The Obama administration hosted a "stakeholders day" on Saturday for business, labor, environmental, and trade activist groups so they could meet with negotiators from the nine countries and discuss their concerns.

 

Barbara Weisel, the chief U.S. negotiator for the TPP talks, also met with the same organizations on Sunday to provide an overview of progress in the talks.

 

The first question for Weisel, according to readout provided by Kirk's office, was a request that the TPP texts be released. Weisel explained it was the U.S. position that the "constantly evolving TPP chapter text's cannot be released to the public."

 

But the U.S. Trade Representative's Office is committed to discussing with interested groups "the formation of U.S. positions, the substance of negotiations as they take place and how issues should be handled by negotiators as talks continue," Weisel said.

 

Meanwhile, Kirk said the United States was pushing hard in the negotiations for rules to leveling the playing field between private companies and "state-owned enterprises" that are becoming bigger players in world trade.

 

Several TPP countries, particularly Vietnam, have a number of state-owned companies that could be affected by the pact, and the United States has a longer-term goal of creating rules that could one day to be applied to China's massive state-owned firms.

 

Kirk conceded the topic is a tough one for negotiators.

 

"This is an area where we're having to get people comfortable with what we are trying to achieve, the level of ambition, and it might take more time," Kirk said, adding he would likely discuss the issue with his TPP counterparts next month in Kazan, Russia, at the annual Asia Pacific Economic Cooperation (APEC) trade ministers meeting.

 

Kirk declined to say whether there would be a decision in Kazan on Japan, Canada and Mexico's interest in joining the TPP talks, first expressed six months ago at an APEC leaders meeting in Honolulu.

 

The nine TPP countries welcome Japan, Canada and Mexico's interest, but have a number of concerns that must be resolved before the three countries can be brought into the talks, he said.

 

"So to some degree, how quickly we make a decision, the nine of us, is in the hands of Japan, Canada and Mexico demonstrating they will resolve those issues that we have been very clear with them about," he said.

 

 

Antidumping duties would raise chicken prices 22.4% in Mexico, study finds

Meatingplace

By Michael Fielding on 5/15/2012

 

Retail chicken prices in Mexico will rise by 22.4 percent, the meat Consumer Price Index (CPI) will jump 7.2 percent and the food CPI by 1.9 percent, should the Mexican government implement duties on U.S. chicken leg quarter imports, according to a study released Monday that assessed the likely impact of the duties on prices and inflation levels in Mexico.

 

Early in 2011, three Mexican poultry companies petitioned the Mexican government to begin an antidumping investigation of imports of chicken leg quarters from the United States, alleging that U.S. companies were exporting leg quarters to Mexico at below-market prices. The Mexican ministry announced its preliminary results with proposed duties on U.S. poultry ranging from 64 percent to 129 percent.

 

Mexico is the largest customer of U.S. poultry exports. Conducted by Dermot Hayes, professor of economics and finance at Iowa State University, the study examined what implementation of the duties would mean for Mexican consumers.

 

Results from the study indicate that in the short term, on an annualized basis, the duties will eliminate 250,000 metric tons of chicken leg quarters from the market and replace them with 79,000 tons of imported whole chicken. Domestic consumption will fall by 163,000 tons, in part because chicken prices will rise by 22.4 percent.

 

 

New report provides a decade of foodborne illness analysis

Meatingplace

By Michael Fielding on 5/14/2012

 

Clinical Infectious Diseases is publishing a supplement, “FoodNet in 2012 – A Foundation for Food Safety in the United States,” which includes new data from the Foodborne Diseases Active Surveillance Network (FoodNet), which tracks important foodborne illnesses trends and provides information used to assess the impact of food safety initiatives on the burden of foodborne illness.

 

Some of the studies in the supplement report that:

 

•The overall frequency of illnesses caused by the six most common foodborne diseases (Campylobacter, Listeria, Salmonella, Shiga toxin-producing E. coli (STEC) O157, Yersinia and Vibrio) was 23 percent lower in 2010 than in 1996-1998. However, a comparison of 2006-2008 to 2010 indicates that progress has slowed recently.

•Salmonella Enteritidis infections are a growing problem in the United States; chicken and eggs are likely major sources.

 

BPI to eliminate dozens of corporate jobs

Meatingplace

By Michael Fielding on 5/15/2012

 

The fallout from the media and social media storm over lean finely textured beef continues to affect Beef Products Inc. (BPI), which announced Monday that it will eliminate as many as 86 corporate employees. On May 8 the company announced that it was not going to resume production of LFTB in three of its four U.S. plants.

 

The latest round of layoffs will be in accounting, logistics, engineering and human resources, as well as reductions at the company’s machine shop/assembly facility in South Sioux City, Neb. This is in addition to the more than 650 employees who will lose their jobs when BPI officially closes its plants in Kansas, Texas and Iowa on May 25.

 

“We are deeply saddened by today’s events,” BPI co-founder Regina Roth said in a statement emailed to Meatingplace. “This causes very personal heartache for us. We are not some big conglomerate, but a small, family-owned business. We personally know and have worked side by side with these people and our family business will never be the same with this loss.”

 

To restore consumer confidence, BPI employees have banded together in recent months using social media and word-of-mouth communications to launch a website — www.BeefIsBeef.com — and encourage consumers to take action by sending their local legislators and retail grocery store letters urging them to bring back ground beef with LFTB.

 

“For the last 30 years, we have dedicated ourselves to producing the safest, highest-quality, all-natural lean beef that has been enjoyed by millions of Americans, and we continue to stand by our product as 100 percent safe, wholesome and nutritious,” said Eldon Roth, BPI co-founder and inventor of much of the technology used by BPI. “We’re convinced that consumer demand for our high quality lean beef will return.”

 

BPI announced that the company would continue to support its former corporate employees in much the same way as those at the affected production locations. “Employees affected by today’s announcement are being offered severance benefits, including continuation of their current pay for 60 days,” said Rich Jochum, corporate administrator. “We will also be working with other employers in the region and within our industry, as well as state and local agencies, to assist these employees in finding new employment. Based on the level of dedication, commitment and capability our employees possess or demonstrate, we are confident that any number of other employers will be anxious to make them part of their team.”