Wednesday, 5 August 2020
Trade data from the world’s biggest beef exporters, show year on year increases in volumes, but at falling prices. In the first five months of 2020, Australia, Brazil and the US exported a combined total of 1.49 million tonnes of fresh/frozen beef. This was 3.4% more than during the same period last year.
Despite starting the year in a strong position, prices for these exports have been falling during 2020. The average price of these countries’ combined exports in May was 5,280 USD/tonne, 3% lower than in May 2019. Only the US reduced its export volumes year on year in May, the 31% decline (-27,000t) was across most destination countries, but Japan and South Korea in particular. This decline was more than offset in volume terms, by Brazil (32,000t) and Australia (7,000t), albeit at lower prices to markets like China. Australia increased exports to both Japan and China. The US typically exports higher value beef than Brazil and Australia, and although this will be influencing the global price, export prices have been falling for all three countries.
A number of forecasts for global beef production and trade over the coming months and years have been released recently, including from the USDA and a longer-term view from the OECD-FAO. The USDA is forecasting a slight decline in global beef production in 2020, although it expects global export volumes to be maintained.
How demand holds up in the face of COVID-19, and the speed and degree of recovery will be key in determining global prices. Increases in the export price of the EU above, will have come about by the UK’s departure of the bloc. The UK imports high value beef from Ireland in particular, trade which will not have featured in this price series until this year.
Although the UK, and indeed Europe are not huge exporters of beef onto the global market, when there is an oversupply in the UK, the world market plays a role in setting domestic prices.
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