USDA forecasts higher beef production and exports in 2020, but more global competition

Wednesday, 29 January 2020

By Duncan Wyatt

The USDA’s beef production estimate for 2019 was adjusted upwards in January to 12.381 million tonnes. This increase was based on a higher than expected cattle slaughter in December, particularly beef cow slaughter. Cow slaughter has been considerably above year-earlier levels since the third quarter. This is thought to be partly because of higher prices and partly because of tight forage supplies for some farmers.

The number of cattle on feedlots in November 2019 was also larger than expected. This will probably lead to higher than expected beef production in the second quarter of 2020. It is thought these calves were placed on feedlots rather than remaining on winter wheat pastures until early 2020 as expected. So, fewer cattle are now expected to come forward in the second half of 2020.

Although still expected to be higher than 2019, the USDA reduced its forecast for 2020 beef production to 12.514 million tonnes.

The US imported more beef (including offal) from almost all its major suppliers in November. Canada, Mexico, Brazil, Uruguay, and Australia all sent more. New Zealand was the only major beef supplier that reduced its volumes. This probably reflects its level of access to Asia, and the increased competition for beef from that region, which is likely to continue in the coming year.

US beef exports to most of its main markets were generally lower in November, although volumes to Hong Kong, Taiwan and China did increase a little. The USDA revised down its beef export expectations for the fourth quarter of 2019. This reflects competition with lower-priced beef in the global market, and lower than expected demand from China for US beef. Export growth is still expected in 2020 though.

The potential for higher US pork exports this year, facilitated by the phase one US-China trade agreement, may also influence the US beef market this year. If pork prices start to rise, this could also elevate other protein markets. Global beef export prices have already been rising.

Image of staff member Duncan Wyatt

Duncan Wyatt

Lead Analyst - Red Meat

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