Taking Stock

Imitation is supposed to be the sincerest form of flattery. But Mexico's proposed new beef-grading system so closely resembles the USDA's program, it may actually hurt U.S. cattle producers.

The new Mexican grading system, announced late last year, would be mandatory. It would include both Spanish and English grade names, with the English grade names being the same as those used by the USDA. So words such as Prime, Choice and Select would be used, yet they would mean something different than they do here.

The U.S. Meat Export Federation's (USMEF) Thad Lively, says as the proposal currently stands, marbling would be as much as a full score lower for the same grade. "A product considered Prime in Mexico's beef-grading system would be more in line with a High Choice grade in ours," he explains.

Lively, vice president for trade access at USMEF, notes the approach "clearly has the potential to create confusion among consumers."

He adds: "It could also diminish the value of U.S. beef and grades, which we have invested a lot of money and time to develop. We believe the U.S. grading system adds to the value of our product."

The USMEF commented on the proposal when the Mexican government opened a proceeding on the issue. Lively says along with concerns over the English grade names, the Federation pointed out differences in marbling scores and the fact that Mexico's standards don't distinguish between bull or bullock carcasses. Also noted: Private graders will be used, and their training would not be on par with USDA graders.

Lively says there is no provision for aligning grades between different certification bodies, and it's unclear from the proposal how or if the integrity of grade labels post-slaughter plant will be maintained through retail packaging, food service and processing. There also appears to be no forum where grading by certification bodies will be made publicly available.

Market Growth

As Mexico works to develop its grading system, it's important to note the country is a key market for U.S. beef. In 2017, Mexico was No. 2 among America's top export markets, buying 216,765 metric tons of U.S. beef (through November). Lively notes even this good news could become a hurdle under a mandatory Mexican grading system, if U.S. product had to receive a grade prior to sale there.

The fact that there will be some sort of grading system for beef in Mexico seems assured. It's a logical next step as the country works to grow its own export markets. Now 11th, Mexico could break into the top 10 of world beef exporters if it sustains recent growth levels.

In 2015, Mexico exported 362,721 metric tons of beef. By 2017, that number (through November) was at 382,658 metric tons. Top markets last year included the U.S. (157,134 metric tons, up 7%), Japan (9,227 metric tons, up 29%) and Hong Kong (5,742 metric tons, up 47.5%).

Cause and Effect

Whether the use of USDA grade names in this new system, at this time of aggressive growth, is an intentional attempt to confuse buyers or simply a way to keep terminology simple and familiar is up for debate. There is little doubt, however, that the move will create confusion for buyers on both sides of the border. It will also lead to inconsistency, which is a guaranteed way to lose good customers for beef.

Before the phone calls and emails start to roll in suggesting the answer to this (and about a million other problems in the beef business) is to bring back Country-of-Origin Labeling, you're singing to the choir, my friend. My country common sense can't reconcile why it's OK for me to know where the cotton in my T-shirt comes from but not where the beef I'm buying to feed my family was raised.

But, as it appears there is nothing in Washington less important than COOL right now, let's think about this another way. Who wants to be in a position to atone for another country's grading system, or its mistakes, down the road? If I were looking at a herd of beef cows right now, that's something I'd be thinking about.

I'd be asking how I could best sell my product for what it is: grown-in-the-U.S. beef. Maybe I'd look at local specialty markets. Maybe I'd research some branded beef programs. Find a way to stand out, because running with the herd just doesn't pay these days.

Editor's Note: This new column for The Progressive Farmer's readers, "Taking Stock," provides insights on those issues, both big and small, that have the potential to affect cattle producers and their livelihoods. Reach Vicki Myers at Vicki.myers@dtn.com

(SK)

Copyright 2018 DTN/The Progressive Farmer. All rights reserved.