Marketing Briefs: Exports drive demand for beef offal

2013-09-17T12:30:00Z Marketing Briefs: Exports drive demand for beef offal Midwest Producer
September 17, 2013 12:30 pm

Export markets are extremely important to the value of U.S. beef offal. Total U.S. beef exports set a record last year at $5.51 billion, with beef offal representing 12.8 percent of the value total and 28.4 percent of the volume. According to the U.S. Meat Export Federation (USMEF), some part of every U.S. beef animal is sold to international customers. USMEF activities are partially funded by the beef checkoff.

Greater Omaha Packing Co. export salesman Jerry Wiggs said without South Korea and Mexico, the market for large and small intestines would "basically disappear." The same can be said for U.S. beef tongue, with more than 90 percent exported to customers in northern Asia and Mexico. Buyers in the Middle East, South America and Russia (when the market is open) buy more than 90 percent of U.S. beef livers, hearts and kidneys. Mexico and Southeast Asia purchase more than 75 percent of U.S. beef stomachs.

According to USMEF, premium offal prices are possible only when the U.S. has unfettered market access. One example is beef livers. The bottom fell out of liver prices when Russia closed its market and shipping access to Egypt was threatened by unrest in the Middle East.

Beef tripe and lips also are dependent on export demand. If Mexico closed, Northern Beef Industries Vice President of Sales Veronica Leon said a big percentage of tripe would go into rendering, resulting in a $4 to $4.50 per animal loss.

Japan resumes purchases of all classes of U.S. wheat

Wheat farmers cheered Japan's decision to resume tenders for all classes of U.S. wheat, including western white (WW) and soft white wheat (SWW). On July 25, Japan purchased approximately 90,000 tons of WW, which it has not done since an announcement in late May by USDA that it is investigating the discovery of volunteer wheat plants with an unapproved genetically modified (GM) trait in a single field in Oregon.

The announcement from Japan comes as a result of a thorough, science-based review of the ongoing investigation by Japan's Ministry of Agriculture, Forestry and Fisheries (MAFF) as well as a sustained effort by the wheat industry, USDA and many others to provide the information MAFF needed to buy all types of wheat again.

Briefly . . .

- Argentina's ethanol production lags behind biodiesel production but is on the upswing, said Lorenzo Basso, the country's secretary to the agriculture minister. Five new corn-based ethanol plants are scheduled to enter service by the end of 2014, which would bring Argentina's total production capacity to 158.5 million gallons. Argentina uses corn and sugarcane to produce ethanol, but it is looking into using biomass to make the biofuel, Basso said.

- The Japan Fair Trade Commission notified Archer Daniels Midland Co. on July 23 of its approval of ADM's proposed acquisition of GrainCorp Limited. This brings the number of government agencies that have cleared the acquisition to five, including South Africa, Canada, Australia and the United States. ADM continues to work with regulators in Australia, China, the European Union and South Korea.

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