Audio: U.S. Beef Remains Strong in Middle East, but Closure of Saudi Arabia Costly
Published: Sep 25, 2012
Dan Halstrom, USMEF senior vice president for global marketing and communications, is in the Middle East this week to meet with USMEF’s representatives in the region as well as with buyers and traders of U.S. beef. With U.S. beef sales expanding rapidly in a section of the globe that stretches all the way from West Africa to Kazakhstan, USMEF has secured the services of a second representative located in Cairo, Egypt, in addition to USMEF’s longtime regional representative based in Beirut, Lebanon.
As Halstrom notes in the attached audio report, social and political unrest in the Middle East has done very little to slow demand for U.S. beef. Through July, beef exports to the region are down slightly in volume (about 201 million pounds) but are still 8 percent ahead of last year’s record pace in terms of value at $202 million. The region has long been a mainstay market for U.S. variety meats such as livers, hearts and kidneys, and those exports are up nearly 20 percent in value to $92 million. Beef muscle cut exports to the Middle East have grown impressively in recent years - and though volume has slipped in 2012, muscle cut export value is still slightly higher than last year at $110 million.
Halstrom says one of the reasons muscle cut export volume is lower this year has been lack of access to Saudi Arabia, which is the only foreign market to have closed to U.S. beef as a result of the April 24 BSE case detected in California. He notes that this market closure has been particularly frustrating for some small U.S. companies that specialize in serving Saudi Arabia, and USMEF is working with U.S. trade officials to regain access.
TRANSCRIPT:
Joe Schuele: This is Joe Schuele with the U.S. Meat Export Federation Report. Dan Halstrom, USMEF Senior Vice President for Global Marketing and Communications, is in the Middle East the week to meet with USMEF’s representatives in the region, as well with buyers and traders of U.S. beef.
Dan Halstrom: Really the exciting part about the Middle East right now is the expansion away from just variety meats. It’s still a big market for variety meats; livers, hearts, kidneys; but the emerging area is the muscle cuts. Five years ago, 95% of our value was variety meats. Last year, 60% of our value was muscle cuts, 40% of the value was variety meats. So, what’s happening is we’re starting to diversify into many different cuts all across the region.
Joe Schuele: Halstrom notes that social and political unrest in the Middle East has done very little to slow demand for U.S. Beef.
Dan Halstrom: The unrest from a humanitarian standpoint is unfortunate. But, the reality is that their desire for higher level, more sophisticated levels of protein continue to increase, and that’s where U.S. Beef, high quality, grain fed beef comes in.
Joe Schuele: He said the region would be preforming even better this year if not for lack of access to Saudi Arabia, which was the only foreign market to have closed to U.S. beef as a result of the April BSE case. This has been especially frustrating for some small U.S. companies that have has success in this market.
Dan Halstom: Some of our smaller, middle size members specialize only in the Middle East. There are several of these members that are dis-proportionally focused on Saudi, so yes, they’ve been hurt with millions of dollars of losses. The ironic thing is, the Middle East, for the most part, the entire region is open unfretted access all cattle, all ages with the exception of Saudi Arabia. And, Saudi was a very good market and we’re starting to lose some of that share now because we’re several months without access and some of our global competitors are starting to get some of that business. So, I know it’s high on our radar for our industry, to regain access into Saudi; it’s high on USDA’s radar as well in Washington. We’ve been working with them and hopefully they can make some breakthroughs with their counterparts on the Saudi side.
Joe Schuele: For more on this and other trade issues, please visit USMEF.org.
As Halstrom notes in the attached audio report, social and political unrest in the Middle East has done very little to slow demand for U.S. beef. Through July, beef exports to the region are down slightly in volume (about 201 million pounds) but are still 8 percent ahead of last year’s record pace in terms of value at $202 million. The region has long been a mainstay market for U.S. variety meats such as livers, hearts and kidneys, and those exports are up nearly 20 percent in value to $92 million. Beef muscle cut exports to the Middle East have grown impressively in recent years - and though volume has slipped in 2012, muscle cut export value is still slightly higher than last year at $110 million.
Halstrom says one of the reasons muscle cut export volume is lower this year has been lack of access to Saudi Arabia, which is the only foreign market to have closed to U.S. beef as a result of the April 24 BSE case detected in California. He notes that this market closure has been particularly frustrating for some small U.S. companies that specialize in serving Saudi Arabia, and USMEF is working with U.S. trade officials to regain access.
TRANSCRIPT:
Joe Schuele: This is Joe Schuele with the U.S. Meat Export Federation Report. Dan Halstrom, USMEF Senior Vice President for Global Marketing and Communications, is in the Middle East the week to meet with USMEF’s representatives in the region, as well with buyers and traders of U.S. beef.
Dan Halstrom: Really the exciting part about the Middle East right now is the expansion away from just variety meats. It’s still a big market for variety meats; livers, hearts, kidneys; but the emerging area is the muscle cuts. Five years ago, 95% of our value was variety meats. Last year, 60% of our value was muscle cuts, 40% of the value was variety meats. So, what’s happening is we’re starting to diversify into many different cuts all across the region.
Joe Schuele: Halstrom notes that social and political unrest in the Middle East has done very little to slow demand for U.S. Beef.
Dan Halstrom: The unrest from a humanitarian standpoint is unfortunate. But, the reality is that their desire for higher level, more sophisticated levels of protein continue to increase, and that’s where U.S. Beef, high quality, grain fed beef comes in.
Joe Schuele: He said the region would be preforming even better this year if not for lack of access to Saudi Arabia, which was the only foreign market to have closed to U.S. beef as a result of the April BSE case. This has been especially frustrating for some small U.S. companies that have has success in this market.
Dan Halstom: Some of our smaller, middle size members specialize only in the Middle East. There are several of these members that are dis-proportionally focused on Saudi, so yes, they’ve been hurt with millions of dollars of losses. The ironic thing is, the Middle East, for the most part, the entire region is open unfretted access all cattle, all ages with the exception of Saudi Arabia. And, Saudi was a very good market and we’re starting to lose some of that share now because we’re several months without access and some of our global competitors are starting to get some of that business. So, I know it’s high on our radar for our industry, to regain access into Saudi; it’s high on USDA’s radar as well in Washington. We’ve been working with them and hopefully they can make some breakthroughs with their counterparts on the Saudi side.
Joe Schuele: For more on this and other trade issues, please visit USMEF.org.