- International demand for beef to outstrip global supply – strong demand from Asia is expected to drive imported beef price inflation
- Global beef production expected to lift by 1% next year, with South America and the US leading this growth
- US herd is set to enter a contraction phase, supporting their export footprint in the short-term
The USDA (United States Department of Agriculture), has recently updated their global beef production, trade and consumption forecasts for 2020. These projections provide an indication of what to expect from Australia’s key competitors in the year ahead.
Robust international demand is expected to drive export growth, with beef exports forecast to reach 11.5 million tonnes in 2020, an increase of 4% on 2019. Increased demand for beef across Asia, underpinned by declining pork production, will be a key factor driving this growth.
The influence of African Swine Fever (ASF) on beef demand is occuring at a time when the global beef supply is set to grow only 0.9% from 2019 levels, meaning supply shortages and strong import prices will likely be maintained. Global production growth will come on the back of production gains in Brazil, the US, India and Argentina, which should offset production declines in China, the EU and Australia.
Demand in China is expected to continue rising, with beef imports in 2020 set to reach 2.9 million tonnes carcase weight (cwt). While the intake of beef and poultry in China will rise, it is unlikely to offset the decline in pork production. Much of the additional demand for beef will likely be captured by South American suppliers, due to availability and a more favourable price point.
The US herd is set to enter the start of a cyclical decline, leading to an uplift in beef production as slaughter rises. Higher prices, so long as demand factors are upheld, will support US exports which are forecast to grow by 6% to 1.5 million tonnes cwt.
Supply from South American suppliers looks strong, with more plant approvals and expected production increases in Brazil, Argentina and Paraguay. Exports from Brazil are forecast to reach 2.6 million tonnes cwt, up 15.6% on 2019 levels – the largest improvement by any exporter.