Beef Facts Matter
Every quarter, the U.S. Department of Agriculture (USDA) publishes their latest Livestock and Poultry World Markets and Trade Report, issued by USDA’s Foreign Agricultural Service, which provides updates and forecasts of beef, pork and chicken production, consumption, exports and imports for major countries in each market.
For 99 percent of the world, the report means nothing, but for the one percent who are interested in meat markets, it means a lot. They understand meat markets are changing yearly due to drought and other factors, and there is a need to stay ahead of trends to make good decisions on meat investments.
The largest part of the World Markets and Trade Report is, as one might guess, beef. Beef is a huge commodity across the world when it comes to producing and/or buying it. There are a large number of people, both in government and in business, who report daily on beef statistics. It is a full-time job.
The largest producers of beef in the world are the U.S. at number one, both in quantity and quality; Brazil at number two; China at number three and the European Union at number four.
India is number five – but remember their beef is actually water buffalo – followed by Argentina at number six, Mexico at number seven, Australia at number eight and Canada at number nine.
During the first quarter of 2023, the report forecasts beef production worldwide to remain unchanged.
U.S. production will fall, while production in Australia, Brazil, China and India will rise nearly one percent due to droughts expiring and greater feed availability. Improved pastures in Australia will support heavier carcass weights, boosting production by 10 percent.
Brazil’s production is forecast to increase two percent as packers slaughter more cattle amid lower calf prices and a firmer domestic market. China’s production is forecast to move up three percent as the lifting of COVID-19-related restrictions increases food service demand.
Lastly, India’s production is up two percent on export demand and marginally higher domestic consumption.
Global exports are forecast fractionally higher in 2023 as lower U.S. exports fully offset growth from Brazil, Australia and India. Outside of the U.S., global exports are anticipated to increase two percent.
U.S. production is forecast down five percent, and our exports down 11 percent.
Entering 2023, the U.S. cattle herd contracted by roughly three percent compared to 2022. As 2023 progresses, a smaller feeder cattle supply relative to last year will reduce feedlot placements, and assuming favorable forage conditions, producers are expected to retain more heifers for breeding given strengthening calf prices.
Thus, cattle slaughter and beef production are expected to be lower in 2023. Lower production is expected to result in tight exportable supplies.
Concurrently, increased Australian production further dampens the outlook for U.S. exports as lower Australian prices reduce demand for U.S. beef, particularly in East Asia.
For ranchers raising beef, feeders feeding beef, meatpackers processing beef or consumers buying beef for dinner, the facts above are the reasons we are paying the prices we do for cattle or beef.