I spoke to Knud Aagaard-Svendsen at Metafoods this afternoon—they distribute high-end beef throughout food service outlets in the European Union. The beef that he sells comes primarily from cattle raised within the Samson system. The main point he made during our call was how happy European customers are with the beef that comes out of this program. "Tell them people love their beef!" he said as he was describing the sales process throughout the E.U. He spoke about Metafoods' ability to capture the high-end European market with a focus on quality. The European consumer's everyday option is driven primarily by the dairy industry, as well as some of the leaner breeds of beef cattle—Charolais, Limousin, and the Italian Piedmontese. While Scottish and Irish producers emphasize Hereford and Angus genetics, the European consumer has been mainly used to a grass-fed product. Once the restaurants in the EU were introduced to Prime and Choice cuts from a grain-fed, American calf, Metafoods' business began to grow. Their competitors, says Knud, thought that if they could send Select and lower Choice beef to the EU, those consumers would be happy. Metafoods took a different tactic—they wanted to move quality. And that is how beef from your cattle has driven the taste for an American beef product across the world.
There are, however, some key components of the European market that contrast with how many Americans, particularly rural Americans, interact with the beef supply chain. The EU is primarily a chilled beef market—the moment a product needs to be frozen, it faces a deep discount. This contrasts significantly with the paradigm many U.S. cattlemen have, as they feed their families with beef from their own freezer. This means that the beef headed for the high-end market in the EU needs to get there extremely quickly and must be sold even quicker. Much of the beef coming from South American countries into the EU is delivered frozen and is generally used in further processing or processed meat products—and is sold at a deep discount. The value of the NHTC market—from ranch to the white tablecloth in the EU—is driven by the quality of the beef sold. All that to say, there is no competition to speak of between the Samson producers delivering NHTC cattle and their South American counterparts. The consumer who buys Brazillian beef can never even dream of buying American beef, so great is the quality difference.
We also took a moment to visit about how producers in Europe are navigating burdensome regulations. You may have seen this article, which describes how farmers in Denmark protested fertilizer restrictions that threaten their family operations. Similarly, regulations for fertilizer applications, including restrictions on how much manure can be applied to cropland throughout the Netherlands, are causing many producers in the region to face ruin or a potential government buyout of their farm. If the new restrictions pass, the Netherlands may need to reduce livestock numbers by 20% - 40% (read the 2024 release from the USDA here). Because of increasing political tension around agricultural regulations, the EU is not a market primed for greater price differentiation—another contrast between the U.S. and the E.U. U.S. consumers continue to increase demand for a more distinctive product. Whether that is antibiotic-free beef, grass-fed, or Non-GMO, producers enroll in voluntary verification programs without an immediate fear of government mandates. This is not so in the E.U. Producers are continually overwhelmed by mandatory regulations, making the development of a new, differentiated product unlikely due to regulatory fatigue and political leanings alone.
Knud also emphasized that beef supply in the EU is quite similar to the beef supply in the United States—high priced and in short supply. The European consumer is still hungry for American beef, and only cattle enrolled in the NHTC program can make the trip to EU customers. We want to encourage producers to continue to enroll in the NHTC program so the value brought to the supply chain by the European consumer can be realized by ranchers, backgrounders, and feeders in the United States.
Since 2003, Metafoods has been a purveyor of fine meats throughout the E.U. thanks to the incredible quality of cattle within this system. The careful attention paid to genetics, health, and feeding by our customers has created the demand for beef throughout Europe.