Buyers shift to other products, but analysts see rise in price for North American beef

By RICHARD SMITH

For the Capital Press

Because of the detection of a banned substance in some U.S. beef, Taiwan buyers are shifting to Australian and New Zealand beef.

Taiwanese officials in January discovered in eight U.S. beef samples and one from Canada traces of ractopamine, a food additive that promotes leanness in cattle. Taiwan bans such additives.

Market watchers could not predict the extent of the market shift or how long it would last.

"Since U.S. beef was detected to contain ractopamine, a number of steakhouse owners have changed their menu to Australia and New Zealand beef to eliminate consumers' concerns," said a translated Taiwanese BCC Radio report e-mailed by Meat Export Federation Taiwan director Davis Wu.

Wu said MEF figures show Taiwan-bound U.S. beef exports dropped from 2,000 tons to 228 tons the week of Jan. 21-27, reflecting uncertainty and disruption in the import market because of ractopamine.

The Canada Beef Export Federation Taiwan director Stella Siao acknowledged the restaurants' switch from U.S. to Australian and New Zealand beef. She also pointed out the price of North American beef has increased about 10 percent since the ractopamine incident.

"This could be one of the factors for the restaurants to make the change. For many steakhouses that use only North American beef, they are not switching," Siao said.

Because of the ractopamine discovery, Canadian exporters voluntarily stopped sending their product to Taiwan through February. They will then either decide to resume exports, continue their suspension "or something in between," Siao said.

Some market watchers have commented that steakhouse owners' sourcing shift will only be temporary, said Siu-Lin Shim, Beef and Lamb New Zealand market manager for China, Hong Kong and Taiwan.

Most of the orders for February were placed in January or earlier, so traders are concerned there will be short supply from Australia due to flooding there, Shim said.

"Supply from New Zealand is tight and price is high," Shim said.

"There is unlikely to be a no-beef-for-selling situation as long as the importers are willing to pay the price" demanded by exporters, she said.

Cattle offerings throughout Australia's southern states have remained largely unaffected by the floods.