The Rural Voice, 1998-02, Page 39Niche marketing
expands Ontario
beef exports
Catering to international markets
has created markets for parts of
Ontario cattle that beef producers
would never imagine, a Kitchener
packer told the Beef Day at Grey -
Bruce Farmers' Week in Elmwood.
Mark Ishoy, general manager of
MGI Packers in Kitchener, told
producers there are markets around
the world for just about everything
on the cattle beast, including lungs,
lips and offal, all things that
generally go into pet foods in
Canada.
The key to MGI's success has
been in processing using the Halal
slaughtering process in which a
Muslim priest blesses each animal
before it dies. This process is
required to sell meat to Moslems,
which make up one third of the
world's population. There are eight
million Moslems in North America.
"Everything we do is fit for the
Moslem market," said Ishoy who
previously worked for Canada
Packers before partnering with
Meullers Meats of Niagara Falls to
start MGI as a slaughter plant.
Meullers, taking advantage of the
fact that southern Ontario is within
10 hours drive of half of North
America's population, had pioneered
going into the New York city and
Philadelphia areas.
When it started, MGI processed
700 animals a week, mainly cull
cows, not only for the U.S. market
but also to Mexico, and Japan. But
adopting Halal practices opened the
market of the Moslem population. "It
gave us a niche market the big
packers didn't want," Ishoy said.
They went into Malaysia where the
population is 18 million and all beef
is imported. They went into
Indonesia which isn't a wealthy
country, but with a population of 180
million people, 10 per cent of whom
are middle and upper class with
money to spend, it's a strong
potential market.
Not only was this a market the big
packers didn't want, it also opened
News
up demand for products that are
generally considered waste in North
America including lungs and offal.
"We merchandise everything",
Ishoy said. "Wherever there is
muscle in cattle there is a product."
The company sells to both Egypt
and Israel. In Egypt, with more than
50 million people, a mainstay of the
diet is liver and kidneys. MGI was
able to gain a foothold in the market
because of fears over mad cow
disease in Egypt's traditional source
of beef in Europe.
But international markets can also
mean hard times at home, he warned.
The currency crisis in Korea, for
instance, has affected North
American packers. One third of all
hides from North American packing
plants go to Korea whcre they are
processed and sent back as shoes and
other leather products. But the
devaluation of the Korean currency
from 700 won to the U.S. dollar to
1800 won to the dollar has hit the
market hard. Korean buyers would
order a container load of hides based
on letters of credit. By the time the
container arrived, however,
sometimes the buyers could no
longer afford it. "Suddenly the
packer who thought he was going to
get $75 a hide found out it wasn't
sold," he said. The result has been a
drop from $75 to $60 in the price of
hides in North America.
Seeking international markets
means adapting to the way others do
things, Ishoy said. "You have to be
very aware of the customers of the
country you're in." In Japan, for
instance, even the way you hand over
your business card can be important.
Japan is a hard market to crack for
beef exports. If, for instance, beef is
worth $1.60 per pound when the
carcass leaves a Canadian packing
plant, it will cost another $1.10 a
pound to air freight it to Japan.
There is then a 40 per cent tariff on
that $2.70 per pound landed price,
driving the cost to nearly $4 to the
Japanese consumer. Still, it's a good
market, that will get better as the
Japanese tariff comes down at a rate
of two per cent a year under World
Trade Organization regulations,
Ishoy says. Japan has a shrinking
landbase and a growing demand.
Feedlots there raise dairy steers. The
Japanese want a Holstein steer
weighing 2,000 pounds live weight
with plenty of marbling. Genetics are
important. Wagu and Holstein -
crossed animals arc the way to get
the taste Japanese want.
New packaging technology,
lowering bacteria counts and
controlling temperature, will mean
that "the day will come when we are
prepackaging for the Japanese
supermarkets," he predicted. It will
take three weeks from the time the
animal is slaughtered until it arrives
in Japan. meaning it will be four
weeks, ideal aging time, for the meat
to get to the consumer.
Marbling is extremely important,
Ishoy said. As more Canada Prime
bccf is produced it should help build
the market in Japan.
But the battle for market is not so
much against other countries, he told
the beef producers, but against other
meats, particularly cheap chicken. He
urged producers to take a careful
look at their practices. "Know what
yields you get at the packing plant,"
he said. The highest price per pound
is not always the best price. "Track
your yields. If you get two per cent
more yield and get a penny less (per
pound), then you should probably
take it."
He also advised to ship to
different packers to test that a
producer is getting the best deal.
And, he said, "You sometimes need
to go back and test old theories."0
Value-added calves
worth the effort
Adding value to feeder calves by
preparing them for feedlot operators
seems to be worth it, cow -calf
operators and feedlot owners agreed
when they discussed the program at
Grey -Bruce Farmers' Week's Beef
Day in Elmwood.
Two different programs were
discussed, the preconditioning
program designed by OPAC and the
pre -vaccination, pre-sorting program
run through the Kcady Livestock
market.
Dr. Ken Bridge, of the Ripley -
Huron Vet Clinic discussed the
FEBRUARY 1998 35