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Va. producers search for new beef markets at export seminar

by Jonathan Cribbs | Nov 21, 2018

Amber Fung of SMH international, a Hong Kong-based marketing firm that works with the Virginia Department of Agriculture, explains the Chinese beef export market to producers in Roanoke, Va., on Nov. 6. (Photo by Jonathan Cribbs)

ROANOKE, Va. — Gary Mitchell came to the Roanoke Higher Education Center hoping to sell more beef.

His southwest Virginia company’s newest product is a retail beef stick — like a Slim Jim, but fancier and grass-fed — and Mitchell, along with other producers, was hoping on Nov. 6 to meet foreign export marketers brought to Roanoke by the Virginia Department of Agriculture and Consumer Services.

China, he figured, might be a nice market for Grayson Natural Farms’ beef sticks, made from cattle produced by two dozen local farmers.

Unfortunately, China doesn’t accept processed meat exports, said Amber Fung of SMH International, a Hong Kong-based marketing firm that works with the state department. Mitchell would have to look elsewhere.

“Well, that’s the way it goes,” he said. “There’s other markets. Indonesia, Malaysia could be interested.”

It was a minor disappointment, but Mitchell met with export marketers from Southeast Asia and Latin America and sees a potential future there. It was part of larger matchmaking effort the state agriculture department organized to educate Virginia producers on beef export verification and opportunities in growth markets.

In Virginia, after broilers, cattle and calves are the second-largest commodity, generating $416 million in cash receipts in 2016, according to state data. Beef and veal exports from the state rose from $26 million in 2008 to nearly $50 million in 2017, according to USDA data, as state leaders aim to make Virginia the top agricultural exporter on the East Coast.

Despite varying trade war concerns, much of the message from the state’s export marketers was uniform: American beef has a strong reputation abroad, and consumers in China, Southeast Asia and Latin America want more of it. In China, Virginia’s top agricultural export market, American beef is “famous for the brand. Famous for premium qualities,” Fung said. “We like it.”

In a series of hour-long presentations, marketers described populations with rising incomes, growing demand for imported beef — much of it American — and a willingness to pay a premium for it. China has become the second-largest beef consumer in the world, but produces about 1 million metric tons less than it needs, requiring a growing dependence on imports, much of which is consumed in so-called “steak bars” and other restaurant settings.

In Southeast Asia, which imported $211 million worth of American beef in 2017, the region’s advanced economies are almost entirely dependent on food imports. Per capita beef consumption was 6.2 kilograms in 2016, and it’s projected to rise over the next three years, though many Muslim-majority countries such as Malaysia require imported meat to be halal, prepared as prescribed by Muslim law.

The region has also been opening its markets to foreign beef suppliers in an effort to reduce the price for local consumers. U.S. beef has a reputation for quality and safety, particularly in Vietnam, said Anna F. Demetillo, a Malaysian market researcher with Orissa International.

“For this market, the U.S. has a very good brand equity,” she said.

Consumers across Latin America are also buying beef more often, as the popularity of pork and chicken wanes, said Monica Moreno Arellano, an agricultural marketing specialist with Grupo PM in Mexico City. Latin America is one of the world’s top beef producers, however.

“Beef is the new protein,” she said.

But an ongoing trade dispute between the United States and China has complicated agricultural exports, Fung said. China has placed a 37 percent duty on American beef exports, more than triple what it was. (Australia, a top beef exporter to Asia, has just a 7.2 percent duty placed on its products.) The dispute has shut down billions of dollars worth of agricultural trade between the United States and China. President Donald Trump responded with a $6 billion aid package, which began mailing checks to farmers in September.

“We’ve hit a few little road bumps with China, but we do believe those are going to get worked out,” said Keith Lang, director of the Virginia agricultural department’s Office of International Marketing.

The department reminded farmers that trade representatives are available to organize trips for those interested in evaluating foreign markets or developing relationships with buyers — a necessity before a farmer decides to join the export market, said Scott Mueller, general manager of Samson LLC, a Nebraska company that provides USDA-approved process verification services for value-added markets.

“Make sure you have a market first,” he said.

It’s something Mitchell said he’s considering. He started Grayson Natural Farms with five cattlemen near the town of Independence, which has struggled over the last several decades as the furniture and textile industries shipped many of the region’s jobs overseas, he said. Grayson processes hundreds of cattle a year, much of it trucked and sold into the Washington, D.C., restaurant and food service industry. The company’s beef sticks were designed as a clever way to get more value out of less popular cuts and to move more cattle.

“The mission is to return more money to local farms,” Mitchell said. “That’s what drives everything.”

The retail side of his business is tough, he said. It can be difficult to move a new product onto already crowded American shelves. Perhaps Southeast Asia and Latin America could ease the company’s growth.

“We’re small. We don’t have a lot of people. We don’t have a lot of resources, and we’re kind of shotgunning it somewhat,” he said. “We’re interested in it, and we’re continuing to learn about it.”

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