US 2014 Beef Exports Outlook Changed to 'Steady'03 December 2013
US - Positive predictions for US beef exports have altered to a 2014 that sees steady trade, say Chicago analysts, Steve Meyer and Len Steiner.
The outlook for US beef imports in 2014 remains very uncertain, write Mr Meyer and Steiner. For much of this year USDA was projecting US beef imports to increase in 2013 but in the latest update, US beef imports for 2014 are now pegged to be about steady with 2013 levels.
With US cow meat (lean beef) supplies expected to decline sharply in 2014, there was some hope that increased imports would offset part the domestic supply decline. US lean beef prices are expected to be higher next year, which normally tends to support imported volumes.
However, a number of the countries that ship lean grinding beef to the US will likely see a decline in their beef output for next year. Furthermore, increasing competition from China could further limit supply availability.
Here’s how the situation looks for the individual counties:
Canada: US beef imports from Canada have declined sharply since 2010. According to US Customs, beef entries through November 25 were down 5.7 per cent from the previous year and down about 41 per cent compared to the same period in 2010. Canadian producers significantly reduced the cattle herd between 2005 and 2010, which meant more product was available for shipment to the US.
In the last three years, however, Canadian cattle supplies have been for the most part steady and there also has been some effort to try and rebuild the herd. Unfortunately, despite higher heifer retention, the size of the Canadian beef cow herd continues to decline.
As of January 1, 2014, USDA the Canadian beef cow herd to be 3.9 million head, compared to 3.925 million head the previous year and 4.5 million head five years ago (2009). Canadian producers also are looking to ship more beef to other markets, which could further reduce shipments to the US.
Australia: Entries of Australian beef through November 25 were down 7.6 per cent compared to the previous year. Imports of Australian beef have declined even as Australian weekly slaughter has averaged about 17 per cent above year ago since March. Drought forced Australian producers to quickly give up much of the herd increase from the past two years.
But even though Australia had a lot more meat to sell this year, imports were down. Almost all the increase in Australian beef supplies was absorbed by China, which has now become the third largest market for Australia. Australia also has seen strong demand from other Asian markets, including Korea as well as Middle East and, recently, Russia.
Some forecasts from Australia are now calling for a decline in slaughter next year. This will limit product arability and significantly higher prices will likely be needed to “buy” product away
from other markets.
New Zealand: Imports from New Zealand are up 8.4 per cent through November 25. New Zealand slaughter spiked last February and March due to the worst drought conditions in more than 30 years. This pushed more beef into the US market. This coming year, however, a combination of a smaller inventory and strong demand for dairy products (the bulk of New Zealand herd is dairy cattle), will tend to limit the supply of grinding beef .
For 2014, the US will remain a favored destination for New Zealand but China could become a bigger player.
Mexico: Imports of Mexican beef have increased sharply in the last four years. Entries so far this year are up 4.9 per cent compared to a year ago but some 148 per cent higher than in 2010. The Mexico cattle herd went from 22.6 MM head in 2009 to 17.6 MM on Jan 1, 2014. The liquidation spears to have come to an end, however, and the expectation is for slaughter in 2014 to decline, which again will tend to limit the supply of beef available to go to the US.
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