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Cargill sees U. S. meat exports slowing

“I would say it is slower than normal and it slowed quicker than it had in the past.”

The growing global economic crisis is putting the brakes on exports of U. S. beef and pork and it may be early next year before conditions improve, a Cargill meat official told Reuters.

“Globally, people’s confidence is much lower than it has been. People are worried about their jobs and worried about money,” said Patrick Binger, assistant vice-president for international sales at Cargill Meat Solutions.

“So all of that impacts consumption. We are seeing a slowdown in just about every market.”

Cargill Meat Solutions, based in Wichita, Kansas, is the meat production unit of privately held agriculture conglomerate Cargill Inc. and is the second-largest U. S. producer of beef and pork behind Tyson Foods.

Exports of U. S. beef and pork have been strong much of this year, which helped meat companies such as Cargill, Tyson and Smithfield Foods cope with higher costs for feed and fuel.

Russia a concern

But that business is now slowing. One area of concern is Russia, where tight credit combined with falling oil prices have eroded buying power.

Russia recently had become an important market for U. S. beef and pork as higher oil prices earlier this year helped it buy more.

While meat exports to Russia and other markets often slow late in every calendar year, as buyers get close to filling annual import quotas, Binger said the slowdown this year has been more severe.

“I would say it is slower than normal and it slowed quicker than it had in the past,” he said.

Year to date through August, Russia had bought $302 million worth of U. S. pork, versus $109 million in 2007, and $67.55 million worth of beef, versus $2 million in 2007, according to data compiled by the U. S. Meat Export Federation (all figures US$).

Exports are important to the U. S. meat industry and in 2007 accounted for seven per cent of beef production, 23 per cent of pork, and 18 per cent of chicken.

Also, exports of all three meats were up significantly in the first eight months versus the same period in 2007, industry data shows.

A slowdown in meat exports has implications for U. S. consumers. Meat for export may be diverted to store shelves and pressure supermarket prices. That happened in 2006, when bird flu fears overseas hurt U. S. chicken exports and put more chicken, at low prices, on store shelves here.

Binger said it may be early 2009 before conditions improve for meat exports.

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