American beef market in a distressed state

Press, 15 January 1982, Page 12

American beef market in a distressed state

By

JOHN HUTCHISON

in San Francisco

The distressed American beef market is reflected in San Francisco in the continuing decline of prices for imports from New Zealand as well as for the domestic product. American beef is retailing for less than at this time a year ago. New Zealand bull meat landed in California is bringing SUS2.6O per kilo at the dock. A year ago it was SUS2.B6. Two years ago the price was SUS3.3O.

Per capita beef consumption in the United States has fallen by 30 per cent since 1977. when it was 58.4 kilos for the year, said Mr Ken Bogel, a representative of the Tupman-Thur-low Co., Inc., which deals in San Francisco in manufacturing beef from New Zealand and Australia. In 1980 that figure fell to 48.2 kilos, and he predicts that the figure for 1981. when released, will slip below 46. Like many experts in the trade, he attributes the decline to several factors, including the general American belief that cholesterol from animal fats is injurious to

health, a theory given increasing credibility in the medical profession for a quarter of a century. “Word's got around," said Mr Bogel, “that beef is given a bad name by doctors." Some major beef retailers, led by Safeway, the nation’s largest supermarket chain, have substituted their own grading system for the traditional government beef standards, and are selling leaner beef. But inconsistently, a public thought to be turned off by the cholesterol hazards of beef, is buying more and more pork, notably high in fat, an indication that straight economics explains the market. Pork is cheaper than beef, and cattlemen lament that a pig produces more meat from less feed than a beef animal, and moves to market in months instead of years.

In 1950, said Mr Bogel, Americans ate more pork than beef, and he believes that condition may return in the next decade. He also noted that the United States is now the highest poultry-consuming

nation, per capita. Over-pro-duction of turkeys for the American Thanksgiving holiday resulted in the birds selling for as little as SUSI.3O per kilo — in some instances less than supermarkets’ and growers' costs.

The shrinking by the Reagan Administration of support prices for milk products is also reported to be causing dairymen to send more cows to slaughter. The normal percentage of such cattle in the beef total is 20. It is now approaching 24 per cent. This lean beef supply competes directly with that from New Zealand in the "manufacturing" grade used in the fast food and processed food industries in the United States. The American beef industry had failed in several attempts to establish a national, govern-ment-authorised beef promotion plan, financed by a levy on the industry. Now, beef councils in 20 states, including California, have organised their own national advertising campaign, to spend s'l million, beginning in April, to whet the American appetite for steaks, roasts and stews.