Recession changes U.S. beef-export strategies

by Bryan Salvage
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DENVER — U.S. beef exports are facing a challenging environment due to the global economic recession. The currencies of many trading partners are down compared to last year, discretionary income has declined and consumers are seeking lower-priced proteins.

During the recently held Cattle Industry Summer Conference in Denver, Thad Lively, U.S. Meat Export Federation senior vice president, briefed cattle producers on several changes in marketing strategy that U.S.M.E.F. has undertaken in order to adapt to these adverse economic conditions.

"We expect to see a fairly long path to recovery from this recession in the global market," Mr. Lively said. "For those of you who are familiar with our programs, an awful lot of what we do is long-term in nature. We view it as building demand in these markets over the long-term. We basically put the direction out for our colleagues in this market...let’s get focused on the near-term. We have a different set of circumstances out there. Maybe some of the things we planned to do this year we can put off for the future. Right now we need to be working very closely with our partners -- both suppliers as well as the buyers -- to do the things that are going to move as much meat as we can in these recession conditions."

Mr. Liveley emphasized, however, these conditions have created some new marketing opportunities. "There are some opportunities to develop some exports through [different] channels in some of the markets," he said. "Channels like convenience-store chains and caterers. Just as it is being done in the U.S., we have definitely intensified efforts to move value cuts."

U.S.M.E.F. has also looked closer at working harder and more intensively to train salespeople. "We have always done a lot of training with product demonstrators, who are in the stores when we do retail promotions," Mr. Lively said. "We’ve added an element in Mexico -- and this is starting to expand to other markets -- of working to train the sales staff or people who import our beef.

"When you’re looking at an environment like the one we’re in, where there’s not going to be growth in the size of the total pie, the size of your share becomes very important," he continued. "Our focus has very much been on defending our share and taking some share from some of our competitor countries."

U.S. beef muscle-cut exports have increased 4% in volume and 2% in value through the first five months of 2009 compared to the same period in 2008. Total beef exports, however, are up only 1% in volume, with a 3% decline in value, due to a decline in variety-meat exports.

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