Beef exports remain strong

Despite the weakening worldwide economy, U.S. beef exports to other countries were up 12% in 2008 over 2007.

There is definitely a demand for the superior U.S. product, finished in the feedlot to standards much higher than beef off grass from our competitors for the international trade like Australia, New Zealand, Argentina and Brazil. 2007 was just the awakening from the long BSE caused closure of the Japanese and Korean markets for U.S. beef, so the trend remained upward in 2008, but the top two markets for U.S. beef--Canada and Mexico--bought more in 2008 too.

This speaks more to the preferability and quality of the U.S. product, that despite a slowing world economy in the latter stages of 2008, they still kept buying U.S. beef. In light of hard-hit U.S. domestic consumers, who are moving down the feeding chain from steaks to hamburger, and beef to chicken, and next, chicken to beans--the foreigners are still buying. This is crucially important for U.S. producers and speaks volumes about how the market is now a world market.

This is why the early drafts passing through the U.S. House of Representatives of the Obama Economic Stimulus bill, which called for all moneys expended under the bill to be spent on U.S. goods, were so damaging. Such a provision would touch off an international trade war, replete with tariffs and counter-tariffs reminiscent of the Smoot-Hawley tariffs that touched off the Great Depression of the 1930s.

Which brings to mind, that there is no comparison between the current downturn and the Great Depression. Unemployment then reached 25%, and today stands at 7.6%. Even the downturn of the 1980s, which everyone has forgotten about, saw unemployment hit 9%. As bad as times might be, we've seen worst times since the Great Depression, than we're seeing now.

Of course it's also beyond question that World War II is what pulled the U.S. out of the Great Depression, not the FDR economic stimulus program. It actually set the recovery back a few years, and the current porkulus bill has the potential to do the same thing.

For the good of the beef industry and cattlemen trying to make a living, my sincere hope is that will not be the case.