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Web posted Tuesday, September 12, 2006


Creekstone says Asian market starting to pick up slowly

By THE ASSOCIATED PRESS

WICHITA-- Kansas beef producers say resumed trade with South Korea and Japan will help them gain back the trust of Asian meat consumers, though they don't think sales will rebound to levels seen before the two countries imposed bans over concerns about mad cow disease.

South Korea had been one of the largest foreign beef markets before the country shut its doors to American beef imports in 2003 after the first U.S. case of mad cow disease. Last week, South Korea agreed to resume those imports.

Kansas meatpacking plant operators say that market's reopening, combined with Japan's decision in July to lift its ban on American beef, will boost sales to Asian markets, albeit gradually.

''We have some product moving, but it's not very fast,'' said Kevin Pentz, general manager at the Arkansas City-based Creekstone Farms Premium Beef. ''I don't think we'll see any great surge in demand.''

Creekstone, which specializes in premium black Angus beef, employs about 750 people to process about 5,250 head of cattle a week. Before 2003, Creekstone had sold about one-third of its beef to Japan, which at one time imported $1.4 billion worth of U.S. beef a year.

But Japan banned U.S. beef imports after the discovery in 2003 of bovine spongiform encephalopathy, a degenerative nerve illness in cattle commonly called mad cow disease.

Creekstone sued the U.S. government in March for refusing to let the company test for mad cow disease in every animal it slaughters, saying the company's Japanese customers wanted comprehensive testing.

Kansas cattlemen agree Japan's decision this summer to resume imports of U.S. beef is having a noticeable impact.

While beef exports still are 57 percent below 2003 levels, they are up almost 70 percent from 2005, said Jim Mintert, a livestock market economist at Kansas State University.

Mintert said the resumption of beef trade with South Korea will bolster those numbers.

''They're allowing beef from animals younger than 30 months of age, where Japan is less than 20 months,'' Mintert said. ''But one major problem is this is boneless beef only, with a zero tolerance for even the smallest bone fragment. That's a tough restriction to meet.''

Mintert said ranchers across the Great Plains are struggling to recover from the summer drought, which forced them to cull herds and sell off livestock. He said that has kept cattlemen from entering the expansion cycle that would be expected with today's prices, which top $92 per hundredweight.

Still, many producers say any progress is a positive step, and resumed trade with South Korea will help build back trust of consumers across Asia as they see that U.S. beef exports are safe and healthy.

''I try to keep looking on the positive side of it,'' said Frank Harper, a Harvey County rancher and small feedlot operator. ''If we can gain a trust factor from their (Japanese and South Korean) visits to our packing plants, it'll be a really good thing.''


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