Falling Production Sees Change in Global Beef Market

GLOBAL - Recent reports on global cattle supplies show a general fall in numbers around the world among the main beef producers, writes TheCattleSite Editor in Chief Chris Harris.
calendar icon 7 February 2012
clock icon 3 minute read

The USDA's National Agricultural Statistics Service in its semi-annual report published at the end of last month shows a 2.1 per cent drop in cattle numbers.

The numbers of cattle and calves is down to 90.77 million, the lowest since 1952.

The latest figures from the Brazilian Institute of Geography and Statistics show cattle slaughterings for the year to September 2011 were almost three per cent down on the previous year and production fell by five per cent to five million tonnes.

Further forecasts for other South American producers show that Argentine production was expected to slip last year by 175,000 tonnes with just a moderate rise this year.

However, domestic restrictions have been holding Argentine beef off the global market and exports are now under half of what they were two years ago.

In Uruguay production is also falling slightly along with exports.

In Europe, beef production last year was expected to be down by 10 per cent and this year a further drop of one per cent is forecast.

Tight supplies and a slow consumer demand across Europe have been anticipated, as the market has also been hit by the Eurozone crisis. Italy and Spain are feeling the pinch most in the drop in beef consumption, showing drops of two and eight per cent respectively.

In Canada, Statistics Canada shows that the cattle herd was down by 0.8 per cent in the middle of last year and slaughter figures for the first half of the year had fallen by 14.1 per cent to 1.6 million head.

With all these falls in production and hence the volume on the global markets, only Australia appears to be bucking the trend at the moment and has the production to take advantage of tighter global supplies.

Meat and Livestock Australia says that continued strong demand from an increasingly diverse range of global markets will combine with favourable seasons to drive an expansion in production and exports in 2012.

An upbeat MLA Chief Economist Tim McRae said total Australian beef and veal production for 2012 is forecast to reach a record 2.197 million tonnes, up 2.2 per cent.

He predicts that global demand for beef is expected to be sustained if not strengthened in Asia, South America and the Middle East and Australia is also poised to take some of the share of the Russian market that has been blocked to Brazilian exporters in food safety and sanitary disputes.

The current market conditions could see a change in fortunes for Australia reversing almost 10 years of falling exports and capitalising on falling production and exports elsewhere.

Only the EU could enjoy similar fortune as its production is outstripping domestic demand allowing it to once again export, but largely in high priced high quality product.

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