Latest / CattleUSA Daily / 233: “Keep It All in the U.S.” Sounds Good. It Doesn’t Work: Beef Trade Explained with Emma Coffman

Transcript

233: “Keep It All in the U.S.” Sounds Good. It Doesn’t Work: Beef Trade Explained with Emma Coffman · CattleUSA Daily

• 0:00
  In today's episode with Emma Kaufman, we are talking about
• 0:03
  export beef demand and what that means for you as a producer here
• 0:07
  in the United States. I think so often people can talk
• 0:10
  about export demand and say it's important and all of these
• 0:13
  things, but you're like how does that actually apply to me?
• 0:15
  In my operation today, Emma and I are taking a 30,000 foot view
• 0:18
  and breaking all of that down for you back home here in the
• 0:22
  United States and what that means for you in your operation.
• 0:25
  Before we hop into today's episode, if you are watching on
• 0:27
  YouTube, make sure you take a second to go subscribe to our
• 0:30
  channel and like this episode. If you're watching on any of our
• 0:33
  other podcast platforms, you guys know the drill at this
• 0:36
  point. Make sure you're following the
• 0:37
  show and go rate and review it as well.
• 0:39
  All of these things truly just help us continue to grow this
• 0:42
  podcast and make a greater impact within the beef industry.
• 0:46
  And without further ado, let's go ahead and hop into this
• 0:49
  episode with them. Welcome to the Cattle USA Daily
• 0:55
  podcast, your go to source for the latest livestock markets,
• 0:59
  industry insights and the updates shaping agriculture
• 1:01
  today. I'm your host, Lauren Moylan, a
• 1:04
  passionate advocate for agriculture here to keep you
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  informed and connected. Now let's dive into today's
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  episode. Emma, welcome back to the
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  podcast. How was your Christmas?
• 1:21
  I know it was a little uneventful for you because I
• 1:24
  hear you were stuck in wonderful Lubbock, TX doing one of your
• 1:28
  million other jobs. But how was Christmas?
• 1:31
  Yeah, You know, Christmas was good.
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  It was just, I was, like you said, working.
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  But it was the hottest year on record for us.
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  And I don't know if anybody else's Christmas was like that,
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  but oh, no, no. This week we decided to get the
• 1:46
  cold weather. But like last week, we were just
• 1:48
  channeling our Hawaiian Christmas vibes.
• 1:50
  I'm not sure what was going on, but it was good.
• 1:53
  How about you, Lauren? It was wonderful.
• 1:55
  Time of family is always great, but I caught whatever Christmas
• 1:58
  crud is out there and let me just tell you, I'm over it.
• 2:03
  I'm I'm done. I'm sick of being sick.
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  We got one virus in our household, got over it, and now
• 2:09
  we have a different one and we are like, we're still
• 2:12
  functional, we're fine, but whatever head cold thing is
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  going around right now, I'm over it.
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  I'm ready to be done. Maybe maybe it's because you
• 2:21
  were living in Kansas. Maybe that's.
• 2:22
  No kidding. Yeah, blame it on that.
• 2:25
  OK. Miss Lubbock, TX And it was
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  like, what, 80 mile an hour straight line winds this weekend
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  and your allergies are now terrible.
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  Yeah, OK. Look pot calling kettles.
• 2:35
  Exactly, exactly. Well, we are here today to talk
• 2:39
  about exports. So, would you like to introduce
• 2:42
  our topic? For us, yeah.
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  So I think this is a big topic conversation, especially right
• 2:48
  now during our low inventory numbers and the price of beef is
• 2:51
  already going up. And I see online a lot in the
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  comment section talking about, well, we shouldn't be exporting
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  or importing. We shouldn't be exporting
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  anything. We should keep it all in house.
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  And then if we really need something, then we need to be
• 3:05
  sustainable. And it's only a last resort to
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  import any kind of beef products in the United States.
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  And I think that there's a lot of that's like an onion, right?
• 3:14
  Like there's a lot of layers to this topic and it's not as black
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  and white cut and dry as maybe you might read in the comments
• 3:22
  section on the Internet or even some people online.
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  I've been seeing them make some pretty misinformed social media
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  content about it. But the fact of the matter is
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  it's it is a relationship that's on a global spectrum.
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  We do this with every single commodity, whether it is
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  precious minerals, whether it's steel and in this case beef.
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  So hopefully we can, I don't think we're going to dive too,
• 3:45
  too deep into it because we will be here for a lot longer than
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  what our time allows, but maybe just get a broad, an overview of
• 3:53
  why this relationship and market and how it works and why.
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  And maybe, hopefully, clear up some things in the air.
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  No pun intended. Yes, absolutely.
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  And I think that this whole topic of export demand where
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  we're exporting, why we import and not just like symbiotic
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  relationship that we have to kind of play there gets
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  overlooked and misinformed constantly because people are
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  like, well, why do we export? Like, why are we importing when
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  we're exporting all of this beef?
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  Why not just stop exporting it and then we can slow our
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  imports? And in theory, you step back and
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  you don't understand fully what's going on.
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  That sounds like a great idea, right?
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  But in practice, that's not how it works because what we export
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  is all of our off cuts. The other countries are going to
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  pay a large premium for that. It is a delicacy in foreign
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  countries to have different things like legs and suit bones
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  and tongues and brain and all of that other stuff that we don't,
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  we don't want that we could use it in certain things, but why
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  use it in dog food here when we can export it at a premium for a
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  greater price to foreign countries that think of it as a
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  delicacy. And then we've also got our
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  ultra ultra prime cuts that like we're seeing a really big uptake
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  in specialty feeding right now, whether that be Wagyu, Wagyu
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  crosses, different things like that, that are going to get us
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  that insane marbling that a lot of our foreign countries really
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  sought are really sought after. And they look to the United
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  States as kind of the gold standard of beef production.
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  And we have created such a great reputation for ourselves of
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  making a really great beef product that it we simply being
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  point blank as a United States population don't eat enough of
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  the really, really high quality beef products to validate
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  keeping it all. And if we can have something
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  that's an ultra ultra prime and we put all this money and input
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  into it, we're not going to grind it like that.
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  We're not going to do that. And that's why we have to bring
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  in imports and lean beef to provide for our ground market as
• 6:04
  well. Yeah.
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  And to your point, you know, why would you waste selling maybe a
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  rib eye for and this is like, and this is like a probably not
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  the best cut example, but like you have Wagyu rib eye that you
• 6:16
  could sell for $100 a pound versus the demands not there.
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  So you grind it up to make $4.00 a pound ground beef.
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  That makes zero sense economically wise.
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  And like you said, there's other countries.
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  A lot of ethnic markets have different priorities in terms of
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  what cuts they like to cook with.
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  Like you mentioned earlier, tongue.
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  Tongue is a very like high level delicacy.
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  In other countries. They slice it really, really
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  thin. It is absolutely amazing.
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  But name how many grocery stores at your neighborhood Walmart are
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  going to carry tongue? Very few.
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  And Even so, a lot of times you have a desert created ethnic
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  markets and whether it's a grocery store chain or maybe an
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  entire chain dedicated to ethnic markets, those might carry that
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  for the different variety of people and cultures that we have
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  here in the United States. But it's not a standard when we
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  think about BBQ 4th of July, I doubt the first person is going
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  to American is going without a cult.
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  You know, cultural background from an overseas country is
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  going to say, yeah, let's BBQ some beef tongue today, get that
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  baby BBQ sauce, baby ribs over here.
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  Like we'll just put it out on the spread.
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  So we got to think about that when we're talking about
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  exports. It's not just whole muscle cuts.
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  There are a lot of off cuts that go into it as well.
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  So the there's a lot of export statistics out there that US
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  Meat Export Federation is a really good resource.
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  They have up to dates, very easy to understand analysis.
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  They break it up into all of beef and then they'll do it
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  muscle cuts and then kind of like your other cuts.
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  So if you want to learn more about the numbers and the
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  percentage changes of last year versus this year, that's a
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  really good resource, not just for beef, but pork, lamb as
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  well. I don't think they do chicken.
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  I think it's just red meat items.
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  So that would be one of my first little propositions if you want
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  to dive more into that topic. But we're looking at a country
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  of the countries across the world that you said look at us
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  as the gold standard. Now, I know a lot of people are
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  like, well, you're not as good as the EU, blah, blah, blah.
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  I disagree. I've been there.
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  I've seen the groceries, I've seen the quality of meat.
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  I would put money on the US beef every single day, night and day.
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  And in fact those other countries in the European Space
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  still buy our product at a premium.
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  I think I looked at a flat iron, if I remember correctly, and it
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  was 28% higher in price over there versus here in the United
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  States. And that's at a, what was it?
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  It's not sterling. What's the other €1.00 that was
• 8:51
  euro versus dollar that I didn't even do the comparison.
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  And the euro is worth more than the dollar right now.
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  So it's probably closer to 30 something percent really.
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  And so when we're looking at an export import market, you know,
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  I think it's kind of funny actually about this topic in
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  this time in this climate of our low beef cattle numbers, because
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  what's the number one thing that you've been seeing in terms of
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  the cattle industry in the consumer space the last what,
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  5-6 months beef prices, OK. So if you're talking about
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  domestically grown product, that does not mean that it is going
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  to be a cheaper product. And we import a lot of lean cuts
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  in order to utilize the carcasses that we have here in
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  the United States to Max capacity.
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  The amount of waste that we would have just because people
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  don't cook with tallow anymore, people don't use the fat as they
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  did 40-50 years ago. So in order to keep that
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  commodity price as low as we can, we fill the gaps and that
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  product is still inspected. It's still safe for you to eat.
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  But I think it's just really kind of you want your cake and
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  eat it too. And you're like, Oh, we should
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  stop importing and we should eat everything that we grow.
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  I'm like, well, then fine, You're going to have to learn
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  how to cook beef cheek. I mean, if, if that's and, and I
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  think our, our population too, is they don't experiment with
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  different cuts. They stay within their realm of
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  comfort. And I get it, sometimes getting
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  and bleeding outside the lines can be a little intimidating,
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  but there's a lot of really good cuts of beef out there that
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  you're not trying because you A, don't know how to cook it, B,
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  you've never had it before, so you don't know really what to
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  expect from it. And see, sometimes they just
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  flat out don't want to try it. How many Cowboys out there are
• 10:33
  digging on the sushi, You know? So like, I don't know, that's
• 10:37
  that fish stuff, but you put tongue in front of them.
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  They may or may not try it depending on the kind of person,
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  what background they were raised in.
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  So like you said, the export market, it's a dance.
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  It is a delicate dance right now.
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  We actually saw a. Flip of our.
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  Top 3 when it comes to export countries, we swapped Mexico for
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  China. Mexico surpassed China for the
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  first time in a long time when it comes to our beef exports.
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  Now that's this September's numbers.
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  They have not released anything past that.
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  So maybe at the end of the year, I'll be really interesting to
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  see what those numbers look like.
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  But Korea, China, Mexico, those are kind of our top three.
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  And then the Japan has been number one for a long time as
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  well. So we're looking at other
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  countries that have a really high percentage of wealthy
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  people that are willing to spend that top dollar on our top ultra
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  prime cuts. And if we can bring that money
• 11:33
  and fuel it into our market, then absolutely kind of a really
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  bad analogy to use, But we look at the horse meat market.
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  We stopped horse meat production here in the United States, even
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  though Mexico was willing to pay a lot of money for that meat
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  product. And same thing with other Asian
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  countries. There was a lot of just ethics,
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  I think arguments behind that. But you know, I'm a I'm a fan
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  of, hey, I'd rather utilize that animal than it wastes out in our
• 11:59
  federal lands and public lands. So I know it's kind of a little
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  bit of a different perspective than what we're talking about
• 12:05
  right now, but it's the same concept.
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  Don't let stuff go to waste. And I don't think a lot of
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  people in the United States are going to be willing to eat horse
• 12:11
  meat. So maybe I'm wrong.
• 12:13
  It's actually really good. For those who haven't tried
• 12:15
  horse, it's very good. But yeah, it's it's just
• 12:19
  reminding ourselves that it's not as simple and as black and
• 12:23
  white as it may seem. Yeah, absolutely.
• 12:27
  You make so many good points. And I, this could be a whole
• 12:29
  different topic in and of itself, but I also agree.
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  I mean, all of our horses are getting sold and getting put on
• 12:34
  trucks to Mexico anyway and they're just getting slaughtered
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  down there. So we might as well do it here
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  in the United States. But that is a whole different
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  topic for a whole another time. Don't even get me started on one
• 12:44
  of those high horses, no pun intended, but but as far as just
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  like everything else goes with our export demand, you made so
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  many great points. And I think it is important for
• 12:55
  the US cattlemen to understand why we need to do this and why
• 13:00
  we do that dance of imports and exports and why it makes sense
• 13:05
  for our economy, why it makes sense for the commodity of beef
• 13:09
  and continuing to be able to keep it a highly sought after
• 13:13
  product in foreign markets. And I mean, you just look at the
• 13:16
  logistics of it and you're like, okay, well, why doesn't Korea
• 13:20
  just have their own beef? And they do it themselves?
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  Well, they don't have the land mass for it.
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  They don't have the land mass, they don't have the people, they
• 13:28
  don't have the infrastructure for it.
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  And so they look at us in the United States and they say, hey,
• 13:33
  you guys can create this at a really high level, a really
• 13:37
  great product and at the demand that we need.
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  So hey, let's do some business here.
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  And I think it's really important going back to what I
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  just said, that the US producer understands that because that
• 13:50
  plays a role in our U.S. economy.
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  We need to look at the world economy and that world economy
• 13:57
  does affect our commodity prices here in the United States and it
• 14:01
  inevitably effects what you're bringing home to your family on
• 14:04
  your operation, operation that is 500, a thousand or five in
• 14:10
  your backyard. It is affecting you because the
• 14:12
  world market does affect everything that we do.
• 14:16
  Absolutely. Well, we got to also remind
• 14:18
  ourselves that we're the most efficient beef producing country
• 14:20
  in the entire world as well. And that comes with genetics,
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  that comes with nutrition, and it also comes with the resources
• 14:25
  that we have here in the United States like China.
• 14:27
  The reason they have to import is exactly to your point about
• 14:30
  Korea. China does not have the
• 14:33
  infrastructure and resources, which is why stop covering our,
• 14:38
  stop covering our pasture land and concrete.
• 14:41
  Stop it. Take that abandoned building in
• 14:44
  your downtown area, revamped apartment complex, whatever.
• 14:47
  But I, you know, we talked about the spread of urbanization,
• 14:50
  which I'm kind of going off track here, but we talked about
• 14:53
  the expansion of urbanization. We are reducing our natural
• 14:55
  resources in order to produce the amount of food that we have
• 14:59
  historically. And that's a problem.
• 15:01
  It's a big problem. So, and we look at other
• 15:03
  countries. I do not want to become a
• 15:06
  country like China that we are dependent upon other places and
• 15:09
  other countries and other governments.
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  So yes, I think we all would love to be completely
• 15:14
  self-sufficient. However, we also are governing
• 15:17
  ourselves very differently than other countries, very
• 15:19
  differently than other nations, and our resources are all
• 15:23
  different. You know, our rainfall in Oregon
• 15:26
  is vastly different than the Panhandle, which is vastly
• 15:29
  different than Florida, which is vastly different than
• 15:31
  California. California grows very specific
• 15:34
  products that only California thrives in because of the
• 15:36
  climate, the soil, the temperature and the rainfall and
• 15:39
  the humidity and the elevation and then the the way they get
• 15:43
  tropical storms in the way that weather patterns move.
• 15:45
  These are all things that you cannot man make.
• 15:48
  We can man make housing and you can put it in places that do not
• 15:52
  take away from our natural resources.
• 15:53
  So there's my PSA, that's my soapbox.
• 15:55
  But you know, I like it. To your point, we are very
• 15:59
  efficient in our beef production system.
• 16:01
  We are, I mean we're king without a doubt, no pun
• 16:05
  intended, I guess it to UK. But when it comes to beef, we
• 16:10
  are, we are top dog and I'm proud of that.
• 16:13
  I'm proud of our producers for that.
• 16:14
  And we just need to keep on that roll.
• 16:16
  But just reminding ourselves that there there's a reason that
• 16:21
  our market, it works the way it works.
• 16:23
  We get other trade deals because of this and it really does
• 16:26
  strengthen our market and our dollar value for producers.
• 16:30
  You know, you're talking about earlier grounding up a rib eye,
• 16:33
  a Wagyu of selling it for $100 a pound versus $5 a pound.
• 16:38
  We know we're talking about producers making money.
• 16:40
  That's a real great way for you not to make any money is to
• 16:43
  devalue your product because of your market share is now in a
• 16:48
  different climate. So just let's keep that in the
• 16:50
  back of our minds. If China, if Japan, if Korea,
• 16:54
  Mexico, they're willing to pay those top dollars, then yeah,
• 16:58
  I'll give you the check. You just sign your name on the
• 17:01
  dotted line my guy. Absolutely.
• 17:03
  You made so many great points today, Emma, and this was just a
• 17:07
  really great discussion. Again, that 30,000 foot view of,
• 17:10
  hey, This is why you need to care as a producer.
• 17:13
  This is why it impacts you on your operation.
• 17:16
  We didn't get into all the nitty gritty numbers or anything like
• 17:19
  that and we would be here for hours if we did that, frankly.
• 17:22
  But like Emma said, there are so many great resources out there.
• 17:26
  USMEF, they have a really great resource on keeping it up to
• 17:30
  date on what our export numbers are looking like in the cattle
• 17:33
  industry, the lamb industry and the pork industry as well.
• 17:36
  And kind of how that looks on just a world standard in the
• 17:39
  world market and how that's affecting our producers back
• 17:42
  home. Emma, thank you for your time
• 17:44
  today to all of our listeners. We will see you all next time on
• 17:48
  another episode of the Cattle USA Daily podcast.
• 17:51
  If you want to follow along on Emma's journey, her advocacy,
• 17:54
  anything like that, make sure you check out the show notes
• 17:56
  down below. I have all of her links down
• 17:58
  below where you can check all of that out and we will see you all
• 18:01
  next time. Have a good one y'all.