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Global beef production forecasts muddied by COVID-19
Wednesday, 22 April 2020
By Felicity Rusk
Global beef production in 2020 is expected to reach 61.53 million tonnes, slightly (-0.2%) less than in the previous year according to the latest outlook from the USDA.
The latest estimate is only marginally lower than previously forecast. It is a reflection of the expected drop in beef demand due to the economic disruption caused by the COVID-19 pandemic, but also the typically long lead times on changes in beef production.
Although the forecast for global beef trade has been revised down from the previous forecast, half of this was due to revisions to conversation factors used. Global beef imports are expected to decline by 1% on the year to 8.72 million tonnes, with most nations expected to record a decline due to closure of the food service sector.
China however bucks the trend, with import demand expected to rise by 15% on the year. The COVID-19 pandemic has only slowed the nation’s pig herd’s recover from African Swine Fever (ASF). As such, the puts the nation further in a protein deficit, which should support import demand.
The economic disruption caused by COVID-19 may also pressure beef consumption in the longer term. Consumers may adjust consumption patterns and may perhaps turn away from more expensive protein sources, which would impact demand.
Meanwhile, the latest report from Gira suggests that beef production will see more volatility this year.
- Brazil - is expected to record the largest declines in production, as falling prices encourage ranchers to retain cattle, limiting the availability of cattle for slaughter. The market could see some recovery in Q3.
- US - is expected to be particularly affected by the loss of carcase balance. Feedlot throughputs are expected to slow, which is expected to reduce production in Q3. Furthermore, low finished prices have pressured feeders, due to a shift in consumer buying to lower value cuts.
- EU – is reportedly already below earlier forecasts. The reduction in demand for prime cuts will weigh on prices, which could cause a backlog on cattle on farms, which could in turn hamper market recovery.
The rapidly changing situation means that making any kind of forecast is challenging at this time. As such, we are likely to see adjustments to future forecasts as the full ramifications of COVID-19 become evident.
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