Beef-Buying Koreans Fuel Record Meat Rally in US Groceries

[논둑길맨발로]

Beef-Buying Koreans Fuel Record Meat Rally in US Groceries

6:07 pm in fuel trade by admin

Retail beef rose to a record $4.475 a pound in March, up 13 percent from a year earlier, after all-time highs the previous three months, U.S. Department of Agriculture data show. Photographer: Daniel Acker/Bloomberg

Food shoppers in South Korea, Mexico
and Japan are fueling a surge in U.S. beef prices just as demand
is set to reach a seasonal peak this month and retailers
including Sam’s Club promote the meat in stores.

Retail beef rose to a record $4.453 a pound in April, up 11
percent from a year earlier, after all-time highs the previous
four months, the U.S. Department of Agriculture said today.
Supplies have tightened as South Korea tripled imports of U.S.
beef in the first quarter from a year earlier, and Japan’s
purchases rose 63 percent, data show.

Costs are gaining at a time when consumers usually boost
purchases by 25 percent from April 1 to the end of May, when
warmer weather encourages grilling outdoors, the National
Cattlemen’s Beef Association said, citing data from FreshLook
Marketing Group LLC. The three-day weekend that includes the
Memorial Day holiday on May 30 this year is usually the busiest
for sales, the Livestock Marketing Information Center estimates.

“We’re probably going to have records in each of the first
six months of 2011,” said Ron Plain, a livestock economist at
the University of Missouri in Columbia who has been studying the
industry for three decades. “It’s a tight meat supply and
especially tight beef supply, and so we’ve got record prices.”

Meat prices are forecast to rise faster than overall U.S.
food costs, which the USDA says may jump as much as 4 percent
this year, the most since 2008. Global food costs rose in April
for the ninth time in 10 months, including an all-time high in
February, according to the United Nations.

Tightening Supply

Per-capita supplies of U.S. beef may drop 4.1 percent in
2012, after the domestic cattle herd on Jan. 1 was the smallest
for that date since 1958, USDA data show.

U.S. exporters shipped 633.3 million pounds (287.3 million
kilograms) of beef in the first three months of 2011, up 32
percent from the same period a year ago, the latest government
data show.

South Korea is the biggest buyer, after the nation’s worst
outbreak of foot-and-mouth disease curbed meat supplies,
according to the USDA. Mexico ranks second, followed by Japan,
which boosted purchases after a nuclear disaster sparked concern
that domestic food supplies were unsafe.

“We’ve had the tight supply situation, and we’ve had very
strong export demand, which has further supported the price
side,” said Erica Rosa, an economist at the Livestock Marketing
Information Center in Denver.

Cattle Futures

Cattle futures reached a record $1.21625 a pound on April
4, and prices are up 17 percent in the past year. Cattle for
August delivery fell 0.8 percent to settle at $1.1055 today on
the Chicago Mercantile Exchange. On April 5, wholesale beef sold
by meat processors reached $1.9196 a pound, the highest since at
least 2004.

Rising costs may discourage purchases of higher-priced cuts
in favor of ground beef or other meats, including chicken or
pork, said Trevor Amen, marketing manager at the National
Cattlemen’s Beef Association in Denver. U.S. shoppers may pay as
much as 8 percent more for beef this year, while poultry may
increase 3.5 percent, the government has forecast.

“Consumers tend to, within the beef category, trade down
to the mid-price to lower-priced items, and ground demand has
been very strong,” Amen said. “They’re either trading down or
they’re trading out to other commodities. What we see retailers
doing is featuring less beef and featuring more of those lower-
priced items, and chicken, pork and maybe even produce, to
remain competitive.”

Consumers May Balk

There are signs that consumers are balking at the higher
prices. Retail sales of beef fell 4.2 percent in the 52 weeks
ended March 27, as average prices jumped 7.4 percent, Amen said,
citing sales data compiled by Hoffman Estates, Illinois-based
FreshLook.

To help spur sales, retailers can offer smaller portions to
reduce the cost per package, or reduce prices for bulk purchases
and include labels instructing consumers how to cut the meat
into steaks and roasts, according to the NCBA.

Grocers including Sam’s Club, a unit of Bentonville,
Arkansas-based Wal-Mart Stores Inc. (WMT), the world’s largest
retailer, have increased promotions of cheaper bulk purchases as
meat rose during the past year, said Abel Pulido, who is
responsible for beef buying for all Sam’s Clubs in the U.S. that
have fresh-meat departments.

“As the economy is tight, there is some savings out
there,” Pulido said. “You just have to be willing and know
that you’re buying more weight at a lower price per pound.”

At Sam’s, a pack of four tenderloin steaks, a high-value
cut of meat, sells for about $10.88 to $11.88 a pound, while an
eight-to-12-steak package costs $8.88 to $9.88 a pound. A case
of the meat, typically 70 pounds to 75 pounds and targeted at
buyers for restaurants, the price is $8.50 to $8.70 a pound.

The USDA’s average beef price is a composite that includes
choice beef, other beef and hamburger values. In today’s report,
the department lowered its estimate of the average price for
March to $4.44.

To contact the reporter on this story:
Elizabeth Campbell in Chicago at
ecampbell14@bloomberg.net

To contact the editor responsible for this story:
Steve Stroth at
sstroth@bloomberg.net

Article source: http://www.bloomberg.com/news/2011-05-13/beef-buying-koreans-fuel-record-meat-rally-in-u-s-supermarkets.html

S. Korea Becomes Largest U.S. Beef Importer for 2 Straight Months
2011.05.15 17:49:36 | 2011.05.15 17:52:18

South Korea has recently become the largest importer of beef from the United States, probably forgetting about the massive public protest against U.S. beef imports three years ago.

The Ministry of Agriculture, Food, Forestry and Fisheries (MIFAFF) announced on Sunday that Korea imported a total of 28,875 tons of U.S. beefs in March, quoting statistics on exports of U.S beef by the U.S. Ministry of Agriculture.

Korea`s U.S. beef imports outstripped those of Mexico, Japan and Canada, which are known as the top three importers of American beef in the world. As a result, Korea is being the world`s largest importer of U. S. beef for two months in a row, accounting for 26% of America`s total beef exports.

As of March this year, the U.S. exported a total of 60,265 tons of beef to Korea. The figure is about to reach 63,817 tons, exported to Korea during the full year of 2009.

The reason why Korea`s U.S. beef imports surged recently is that Korean consumers` perception toward safety of American beef has been greatly improved. As the market promotes U.S. beef as less expensive and high in quality, more and more consumers are opting for the beef at large discount stores and restaurants.

The outbreak of foot-and-mouth disease (FMD) last year also contributed to the rise in consumption of U.S. beef in Korea. Consumers who used to strongly prefer Korean-reared beef to the controversial American beef are turning to the latter as an alternative. Supply of Korean beef has been drastically slashed as the government prohibited farms found to be contaminated with the disease from buying and raising cattle. Consumers are now deeply worried about safety of the Korean beef.

"Consumption of U.S. beef outnumbered that of Korean beef in January and February. It seems that some of Korean beef consumers switched to U.S. beef as an alternative," a researcher from Korea Rural Economic Institute (KREI).

However, experts believe that Korea`s rise to the top of the list of U.S. beef importers is a temporary phenomenon, because Korean beef still maintains price competitiveness as the price of Korean beef fell by 30% after the outbreak of FMD, and backlogs of U.S. beef are already piling up.

[Written by Gee-chang Lee - Su-hyun Song]


[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]