Seeking New Destinations for U.S. Beef Livers
NOTE: This article was originally prepared by USMEF staff for publication in BEEF Magazine. See the original version online.
To maximize the value of every steer and heifer slaughtered in the United States, it is essential that products commanding little interest from American consumers – such as beef livers – find a home in the international marketplace. This is a win-win for all involved, as the U.S. producer receives more value per animal and consumers in less developed countries have access to an economically priced protein source.
Liver production depends entirely on U.S. slaughter numbers. Therefore it is not surprising that the recent peak year for U.S. liver exports was 2011, reaching 101,389 metric tons (mt). From 2012 through 2014, liver exports averaged about 87,000 mt. With herd rebuilding reducing last year’s slaughter, 2015 liver exports dropped to just 72,641 mt, partly reflecting lower production. Due to these lower supplies and an increasingly competitive global market, the U.S. share of all livers exported worldwide declined from 53 percent in 2010 to 37 percent last year.
Now that U.S. slaughter numbers are again trending higher and liver production is increasing, it is important that the U.S. industry expand its international customer base for beef livers in order to maintain strong demand and win back global market share. This is a top priority for USMEF.
“The U.S. industry has been very successful in deriving a strong return for beef livers, but maintaining that success is an ongoing challenge,” explained Dan Halstrom, USMEF senior vice president for marketing. “Russia used to be a mainstay destination for U.S. livers, but we no longer have access to that market. We also lost access for livers in Indonesia, which was a significant buyer before the government placed limits on eligible beef items.”
Before the Russian market closed to U.S. beef in early 2013, Russia was the second-largest destination for U.S. livers, trailing only Egypt. In 2012, Russia took 13,083 mt of U.S. livers – about 15 percent of total U.S. liver exports. Although liver exports increased slightly the following year, USMEF estimates that the loss of the Russian market cost the U.S. industry more than $26 million as fewer buyers for U.S. livers resulted in lower prices.
Russia’s absence has further heightened Egypt’s importance as a destination for U.S. livers. In 2012, liver exports to Egypt totaled 49,342 mt, or about 58 percent of all U.S. livers exported. In 2015, Egypt took 59,738 mt – accounting for 86 percent.
“Egypt continues to be an outstanding market for U.S. livers, and we cannot overstate how much the U.S. industry appreciates Egypt as an essential and reliable trading partner,” Halstrom said. “But it is very important that we find alternative destinations – not only to ensure strong export volumes, but also to maintain strong prices by bringing more buyers into the market. USMEF staff members are working to educate these customers on the nutritional value of U.S. livers, and on the quality advantage of livers harvested from U.S cattle, which are typically slaughtered at a younger age than our competition.”
Angola recently emerged as a promising destination for U.S. livers, with 2012-2014 exports averaging more than 5,400 mt per year. But with U.S. livers in shorter supply last year and Angola’s economy slumping due to falling oil prices, exports fell to 1,475 mt. USMEF is not only seeking a rebound in exports to Angola in 2016, but is also working to expand the customer base for livers in other African markets such as Ghana, Benin, Gabon and South Africa.
“South Africa just reopened to U.S. beef in January – the first time we have had access to this market since 2003,” Halstrom said. “This will help bolster USMEF’s efforts to move more U.S. beef – including livers – into Sub-Saharan Africa, which is an initiative we launched about two years ago. Exporters are very excited about the potential for growth in this region, as several of these countries have emerging economies and rapidly growing retail and meat processing sectors.”
In the Western Hemisphere, the main destinations for U.S. livers are Mexico and Peru. Both saw solid increases in 2015, with Mexico taking 3,733 mt (up 34 percent year-over-year) and Peru 2,358 mt (up 17 percent). USMEF sees potential for liver export growth in Central America, South America and the Caribbean, both as raw material for further processing and as a retail item.
“U.S. suppliers have been able to penetrate the liver market in countries like Colombia, Chile and Jamaica, but there is excellent potential for further growth,” Halstrom said. “Free trade agreements have provided better access to several countries in this region, eliminating tariffs and other obstacles for U.S. livers. This is extremely important, because we’re competing with both domestic product and livers from South America’s large beef-producing countries.”
Diversifying the market for U.S. beef livers will be a featured topic when the USMEF Beef and Allied Industries Committee meets at the upcoming USMEF Board of Directors Meeting and Product Showcase, May 25-27 in St. Louis.