Global beef export prices rising, driven by US demand for VL beef

Global beef export prices were rising through most of 2021 although they did cool slightly during the fourth quarter. Although this took the edge off prices slightly, they are still elevated compared to historic averages.

Why are prices rising?

Over the past ten years, beef production in most major exporting countries has been relatively stable apart from Brazil. Meanwhile, global demand has increased through both a growing global population, and a growing Asian middle class.

Labour costs, along with many other costs (including energy) have been rising for some months, only made worse by the Ukraine/Russia conflict. The conflict has also sent grain prices, which were also already high, even higher.

Frozen beef stocks in the US were low last year too, supporting prices, although they have since recovered somewhat.

Overall, reports suggest it is the price of lean boneless beef which is providing the most drive to prices. Wholesale prices for 93% lean ground beef are up 26% compared to year earlier levels, whereas many other cuts are stable, according to USDA data. Reports suggest wholesale prices for UK visibly lean (VL) boneless beef is up over a third compared to a year ago.

This demand for and shortage of VL beef is helping underpin global prices, and in turn global cattle prices. As the UK imports significant volumes of beef from Ireland, which exports widely, it may not be a stretch to suggest that these prices are in turn helping support British prices alongside the tighter number of British cattle available to kill.

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