If there was a common thread running through the World Meat Congress last week in Brisbane, Australia, it wrapped around three evolving consumer demands -- transparency, traceability and trust.
"We've never seen global competition for meat protein markets this intense," says Patrick "Paddy" Moore of Dublin, Ireland, chairman of the International Meat Secretariate (IMS). "And let me tell you, we haven't seen anything yet."
Brazilian Marcos Fava Neves, University of São Paulo professor of food marketing strategy, wonders why livestock traceability isn't being adopted in some areas of the world.
"Traceability is the non-negotiable foundation of trust," he says. "Without traceability, how can you be held accountable for what you produce? How else can you be rewarded for what you produce?"
Following is a snapshot of the "meat situation" in some selected countries: In an extraordinary move earlier this year, Argentine president Nestor Kirchner increased federal taxes on beef exports and cancelled rebates of other taxes. His move, which infuriated Argentine producers, was aimed at rising inflation and escalating food prices. The target was the beef purveyor diverting beef supplies from the domestic market to meet export demand.
Demand from Australian beef in the North Pacific Rim skyrocketed followed the discovery of BSE in North America. David Bailey, economist with the Australian Bureau of Agricultural and Resource Economics, says his country's new animal traceability program has been critical in gaining market share in Japan.
While Brazilian cattle numbers increased dramatically the past decade, Brazilian consultant José Puoli says herd growth shows signs of slowing -- possibly retracting -- as profitability in the cattle sector diminishes. He points to intensifying competition for the better ag land as farmers scramble to grow sugarcane for fuel ethanol production. This is pushing Brazilian cattle north and northeast into the harsher, drier and more isolated regions of the country where production costs and risks are higher.
Asia is experiencing dramatic increases in per-capita consumption of meat. China, where per capita meat consumption doubled between 1983 and 1993, is leading the way.
"China will import a lot of meat for a long time," England's David Hughes says. "In the end, I suspect Brazil will become the major supplier of beef to China because it will remain the world's least-cost supplier -- and it's 'form' will suit the Chinese just fine."
European Union beef production is evolving into a new market-based economy with reform of the (EU) 2003 Common Ag Policy program. But, Scottish abattoir manager, John Craig, Edinburgh, Scotland, says EU-wide cattle production has been permanently damaged by failed subsidy schemes. He says cattle farming became a numbers game whereupon the financial rewards from sitting in the house calculating stocking rates were greater and more secure than improving technical efficiency at farm level.
As the UK slashes its way out of the BSE era, the Over 30-Month Scheme is ending. This means about 500,000 cattle born after August 1, 1996, will be available for human consumption.
The Russian meat protein market is among the most fickle and unpredictable, says a senior IMS member, and, by all accounts, also among the most corrupt. He says (not jokingly) that Russian market access is best achieved by identifying key import inspectors, then occasionally "giving them big bags of money and treating them to hotel rooms in the red light district in Amsterdam."
In 2005, U.S. beef and beef variety meat exports to Russia totaled 3,250mt, valued at $1.87 million -- a fraction of the 71,400mt (at $59.5 million) exported in 2002. USDA export aggregations show the beef-export picture to be even more dismal through 2006.
Uruguayan beef production and exports expanded since 1995 when the country was declared free of FMD with vaccination. Grass-finishing systems dominate beef production in Uruguay.
NAFTA countries make up 78% of Uruguay's export market share. U.S. imports of fresh and frozen beef from Uruguay resumed in May 2003 under a 20,000mt tariff rate quota (TRQ). Of these imports, 80% are in the form of lean trimmings. Despite a 26.4% over-quota tariff, imports in 2005 increased 55.4% from 2004 levels.
Last year, importers of Uruguayan beef paid the U.S. Treasury nearly $100 million dollars in over-quota tariffs. Uruguayans have been in Washington, D.C., lobbying to raise the country's TRQ. But with Brazil and Argentina waiting in the wings to enter the NAFTA fresh beef markets, it is unlikely U.S. trade negotiators will increase Uruguay's quota. -- Clint Peck