U.S. ranchers happy to see added foreign market

U.S. cattle producers facing skyrocketing costs and stagnant domestic demand say they need overseas markets like South Korea in order to avoid substantial dips in their bottom lines.

The U.S. last week reached an agreement with South Korea that allows American beef from cattle younger than 30 months to be sent to the Asian country. An April agreement that permitted beef from older cattle stirred thousands of Koreans to protest, forcing officials to renegotiate the trade pact.

Before reacting to the first U.S. case of mad cow disease by banning its beef in 2003, South Korea was the third-largest export customer with $815 million in sales. Officials with cattle groups indicate a larger middle class in South Korea could push that value to close to $1 billion.

Ranchers are likely to rely on the impending South Korean deal and other emerging markets to offset soaring costs for feed and fuel that have led to sales losses of $70 to $100 per head.

"We're going to have to depend on these export markets to get through these tough times," said John Means of Van Horn, president of the Fort Worth-based Texas and Southwestern Cattle Raisers Association, whose 15,000 members produce 3.7 million cattle.

About 96 percent of the potential consumer markets for U.S. beef are outside of America, where a weak dollar is also hurting ranchers, Means said.

"It's a tremendous opportunity we have, and we have to seize the moment," he said. "We're really looking forward to getting this wrapped up and providing them our nutritious and safe product."