My, How The World Has Changed Since 2003
There seems to be a general belief all we need to regain our markets is win back access. However, we're facing a drastically different world than prior to the U.S. discovery of BSE in December 2003.
Among the nations that have had BSE, the U.S. is the only one that hasn't, or isn't in the process of implementing, a traceback system. Canada has only built a competitive packing industry. Instead having of a partner in the behemoth that was the North American beef industry in the export market, - the U.S. has helped create a fierce competitor for the high-quality market.
Plus, Canada will be a highly subsidized competitor to boot. Our counterparts north of the border have $80 million in the bank for overseas beef promotion.
Prior to BSE, the U.S. controlled more than 23% of the global beef export market. Today, it's less than 3%. Australia and others are committed to keeping the market share they've won in our absence. Growth in Argentina and Brazil is well documented and impressive. Uruguay essentially put in place the ultimate in process verification, certifying the entire production system.
Things have changed even domestically. Despite record prices, the U.S. share of its own domestic market is the smallest in its history. Not surprisingly, the tremendous demand growth we've experienced is beginning to wane. We've officially entered into the expansion phase of the cattle cycle, with the highs in prices clearly established and price trends now moving the other way.
From a political standpoint, we can't ignore the continued urbanization - or suburbanization - of the legislative branch of government, as rural America continues to lose seats in Congress, and political clout.
The U.S. remains the low-cost producer of high-quality, corn-fed beef, and boasts the world's best infrastructure, genetics, management, feeding, processing and marketing systems, as well as the best product. But, it's a much more competitive environment globally than when we left it.
-- Troy Marshall