Trade

Kay’s Cuts: US wins meaty victory, but what happened in Australia?

Beef Central, 05/11/2015

Steve Kay 1 (2)A monthly column written exclusively for Beef Central by US red meat industry commentator, Steve Kay, publisher of US Cattle Buyers’ Weekly

 

 

 

 

 

 

 

 

 

A RECENT report that tried to link eating processed meats and red meat to cancer has been consigned to the dustbin, in the US, at least.

But it is still worth reviewing what happened to remind all in the global meat and livestock industry how important it is to raise loud objections to such reports.

The report came from the World Health Organisation’s International Agency for Research on Cancer (IARC) and classified processed meats as carcinogenic to humans and red meat as probably carcinogenic (see Beef Central’s original report).

Initial US media coverage was negative, with headlines mirroring what IARC claimed.

Then something remarkable happened. Within 24 hours, social media all over the world was full of outraged comments from bacon and meat lovers.

Then something remarkable happened. Within 24 hours, the social media all over the world was full of outraged comments from bacon and meat lovers. They skewered the IARC panel and some highlighted the report’s shortcomings almost as well as industry groups had. A Reuters review of social media comments had them running seven to one against the report.

This was a rare but welcome time when social media rallied to the meat industry’s defense. It was in complete contrast to how the same media in the US savaged a perfectly wholesome and safe lean beef product produced by Beef Products, Inc, and nearly put the company out of business.

All this forced the WHO to eat humble pie. It hastily offered what it called a follow-up and clarification on its recommendations regarding meat consumption. It admitted there were shortcomings with the IARC’s classifications, which allowed the results to be misinterpreted. WHO even distanced itself from comments made by IARC panel members saying that processed meats should be avoided. The WHO says it will further look at the place of processed meat and red meat within the context of an overall healthy diet in 2016.

It’s hard to tell if the social media response forced the WHO’s dramatic retreat more than the meat industry’s criticism of the report.

But the latter played a big part in the US The North American Meat Institute had an observer, Dr Betsy Booren, at the IARC discussions and she didn’t mince words about how she saw the panel work. It was clear that many of the panelists were aiming for a specific result despite old, weak, inconsistent, self-reported intake data, and they tortured the data to ensure a specific outcome, she said.

NAMI and the National Cattlemen’s Beef Association attacked every aspect of the report, in contrast to the tepid response I saw from trade groups in some other large meat-producing countries.

For a country that relies heavily on the meat industry for job creation and export dollars, I expected much more

Maybe Australia’s response was muted because the IARC panel was chaired by Dr Bernard Stewart, one of Australia’s most prominent cancer specialists. But for a country that relies heavily on the meat industry for job creation and export dollars, I expected much more.

My takeaway from the whole episode is that the WHO has damaged its reputation and will have to work harder in the future to avoid similar reports being published.

Second, it will likely have to publicise the benefits of meat consumption. In this regard, the US meat industry, at least, won an important victory that will have lasting positive consequences.

 

Turkey time approaches

Meanwhile, US grocery chain ads for cheap turkeys have started appearing and the US meat market is marking time ahead of the Thanksgiving holiday on November 26.

Turkeys usually dominate meat and poultry sales the two weeks before the holiday and this year will be no exception, despite a slight reduction in supply. That’s due to a highly pathogenic strain of avian influenza that killed several million birds last winter and spring.

Beef always faces added competition in the US in the fourth quarter. October is National Pork Month, which means increased promotional activity by the pork industry.

Its job was made easier this year because pork is still priced well below beef. Its average retail price in September was US$3.92 per pound (equivalent of A$12/kg). This was 7.1pc below the September price last year.

In contrast, the All Beef price averaged US$6.08 per pound (A$18.60/kg). Chicken was even cheaper at US$1.95 per pound (less than A$6/kg).

Pork and chicken were thus the protein items that grocery chains featured most in October. Some good beef feature prices appeared towards the end of the month. But grocery stores, to their chagrin, found that consumers “cherry-picked” the feature items and didn’t buy so many beef items at their everyday prices.

The result was that the increased sales volume generated by lower feature prices did not result in overall revenue increases. US retailers are thus wary of featuring beef more aggressively.

The avian flu losses will means tighter supplies of heavy turkeys and turkey breasts this year. This suggests that turkeys left unsold after the holiday might be cleared out a little faster than normal.

US beef’s marketing window for wholesale prices to increase comes after the holiday until mid-December, with rib prices leading the way. That’s because rib roasts are a popular Christmas dinner item.

One twist this year is that light ribs are scarce. Record heavy carcase weights mean fewer light ribs are being produced. Also, more have been forward-contracted so the number being offered on the cash market is small. The result is that they are selling at a hefty premium to heavy ribeyes.

Fed beef processors meanwhile have been unable to raise boxed beef wholesale prices anywhere near enough to offset the surge in their grainfed cattle costs the first three weeks of October.

So their operating margins have returned to a more normal fourth quarter level, at or just above breakeven. Packers lost money in the fourth quarter last year and they will need a minor miracle on the beef side of the market not to have a repeat this year.

 

 

 

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Comments

  1. Tony Struckle, 06/11/2015

    Unfortunately too much of what MLA and CCA do in the social awareness space is ‘beige’. They are not prepared to get into the trenches. They missed a colossal opportunity here to reinforce their commitment, in the eyes of the average Australian beef industry stakeholder. I agree with Peter Vincent – somebody with marketing ‘smarts’ would have seen this opportunity a mile off.

  2. andy bennett, 05/11/2015

    Genuine statistics blew this lot out of the water .Too many times we see these meat haters twisting the truth trying to lead everyone up the garden path to the vege patch

  3. Peter Vincent, 05/11/2015

    Steve Kay’s perception of the Australian response to the WHO report is correct. MLA is responsible for the promotion of Australian red meats which also infers defence of Australian red meats however as usual, we turn the other cheek. It’s all-too-hard and we might end up a loser.
    Since inception MLA has maintained the need of a Board of Directors appointed on the basis of particular skills and experience; a need to which the members have acceded. Members et al are well-served with market reports and poorly served with market statistics, however like most rural-based industries, there appears to be a void of knowledge when it comes to social intelligence.
    When was the last time MLA appointed a director with marketing skills? Do the peak industry organisations and major statutory organisations within the red meats industries have a “red phone” conduit to consider and if necessary, counter detrimental threats to the Australian industries? Release of the WHO report was flagged weeks ahead of publication so adequate preparation to counter unwarranted criticism and erroneous data was available to all and sundry. Did MLA or CCA contact NBCA in the US or any other of the major global producers’ organisations to immediately co-ordinate a joint-defence of red meat consumption?
    Or will we simply hope that it all goes away …… like we’ve always done.

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