Lean Finely Textured Beef To Return

Tight beef markets dictate intolerance of wasting the valuable product, Rabobank says.

Published on: Jul 26, 2012

As the U.S. rapidly enters a period of the tightest beef supplies in modern history, researchers at Rabobank's Food & Agribusiness Research and Advisory group predict the portion of U.S. beef supply that was made up of Lean Finely Textured Beef will, following necessary industry changes, return to the U.S. food supply. The group cites the industry's intolerance of wasting the valuable product as the primary reason for the return.

"In the tight U.S. beef market, beef processors consider 2% of the beef supply as simply too much to waste," notes report author Don Close, Vice President, Food and Agribusiness Research & Advisory, Animal Protein.

Lean Finely Textured Beef To Return
Lean Finely Textured Beef To Return

Lower production levels, due in part to drought in the U.S., and increased global export demands are contributing to the tight market.

The FAR group's "LFTB: Beef's Latest Battleground for Survival" report notes that one of the outcomes of the LFTB controversy is a significant cost to the entire U.S. beef industry — from LFTB manufacturers, packers and feeders to retailers and consumers—due to significantly reduced production. LFTB production currently stands at less than 25% of capacity.

"It is far too early to determine a final outcome for LFTB. As time moves on, there will be an opportunity for the channel and consumers to better evaluate the relative merits of LFTB as a cost-efficient source of safe, lean beef protein," says Close. "It will require the beef industry to make a more sustained effort to educate consumers on the product, to dispel the myths and concerns that have grown through the LFTB crisis and to regain the trust of consumers, regulators and retailers, so that the beef industry can ensure the market has confidence in the safety and nutrition of LFTB."

The report notes the re-entry of LFTB into the U.S. beef supply is contingent on needed changes in the formulation of the product, as well as assurance from the USDA as to the safety and nutrition of the product.

"Over time consumers are likely to accept a return of the product—albeit with greater labeling transparency—as facts about LFTB becomes better understood and consumers have the opportunity to see the benefits of LFTB as a safe, cheap source of beef protein," says Close.