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World beef trade’s ‘swings and roundabouts’

Beef Central, 22/04/2015

THE United States Department of Agriculture recently issued its biannual review of global livestock and poultry markets, providing historical supply and trade information and offering estimates of the global supply/demand outlook for 2015.

The full report, which can be accessed here, is published in April and October each year.

Over the years, global trade in livestock and poultry has become a significant factor, in part because of the surge in demand from emerging markets but also due to the emergence of large global producers in Asia and South America, challenging traditonal exporting countries like the US and Australia.

In a recent edition of its Daily Livestock Report, Steiner Consulting noted that shifts in global meat trade often had significant implications for prices in the US domestic market.

World beef demand changes

 

In the beef segment of the meat protein spectrum, some may not realise that the US is again the largest beef importer in the world.

“Most of the beef coming here is lean manufacturing beef that goes into hamburger production and a strong US$ and record high lean beef values have made the US the most valuable grinding beef market in the world,” DLR’s report said.

As a result, most beef suppliers to the US have ramped-up shipments – Australia included.

US beef imports for 2015 currently are projected at 1.32 million tonnes carcase weight, revised upwards by 95,000t by USDA compared to its October forecast. The figure is still slightly lower than in 2014, however.

“Worth noting, though, is that US beef imports are 387,000t higher than in 2011. That’s a rise of 41pc,” DLR said.

As can be seen in DLR’s graph, published here, Australia has gone against that broader trend, lifting exports to the US for the calendar year to date by some 56pc, year-on-year.

Growth from China transforms world beef trade

Export Hamburg Sud containers tradeChina has emerged in recent years as a global beef buyer and the latest USDA data confirmed that position. Combined beef imports of China Mainland and Hong Kong in 2015 are projected by USDA at 1.25 million tonnes, revised lower from the 1.265 MT projected in October but still 18pc higher than in 2014.

“It is truly impressive that in 2011, combined beef imports from China/Hong Kong were a mere 181,000 MT,” DLR notes.

“The growth in Chinese beef demand has certainly transformed world beef trade. China has been able to fill its growing needs through both direct purchases from Australia and Uruguay, as well as indirect flows from Hong Kong and neighbouring countries, which in turn rely on US and Brazil for beef supply,” DLT’s report said.

India becomes supply giant

If China has been the major market mover on the import side, India has become by far the largest beef exporter in the world, with product shipped across price-sensitive markets in Asia, the Middle East and Africa.

Some product is likely finds its way into China via the grey channel trade, but because of its FMD status it does not compete directly with the US.

“As with China, Indian beef supply bears watching as it has an outsized influence on global beef trade,” DLR suggests.

Brazil exports in 2015 are currently forecast by USDA to be 2 million MT, revised down by 235,000t compared to the October forecast, but still 5pc higher than a year ago and 50% higher than in 2011.

“World beef trade has been shifting, with more product available in South America and India and increased demand in North America and Asia,” DLR said.

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