Global Beef Consumption - US Convincing Others to Eat Beef?

ANALYSIS - With a modest 2 to 7 per cent increase expected in beef consumption in developing countries, will the US need to convince countries like China and Japan to eat more beef, writes Sarah Mikesell, TheCattleSite senior editor.

29 January 2011

3 minute read

Most beef consumption is in developed countries with cash to spend, said said Rich Nelson, Allendale Inc. Director of Research, in late January at the Allendale Ag Leaders Outlook Conference.

China and developing countries are expected to see a 3 per cent increase in beef consumption. Japan's consumption should be up 2 per cent, while South Korea will see the biggest jump at 7 per cent.

"We're only looking at a 2 to 7 per cent increase in beef consumption, so that says to me that we are having to convincing people to buy beef," Nelson said. "China is a pork country first and they are a distant second as a poultry consumer. But they're very small buyers of beef."

That said, Nelson noted that the amount China will buy is creating a very moderate demand pull from exports right now.

US Beef Exports

The US has historically been a net importer of beef, importing what is essentially ground beef (based on weight, not value). The US exports mostly high-value beef cuts.

"In 2011, we became net beef exporters, not just in value, but for the first time in quantity as well," Nelson said.

According to the US Meat Export Federation, beef exports finished the year at 1.287 million metric tons valued at $5.42 billion. Export volume was 21 per cent larger than in 2010, with value up 33 per cent.

Canada was the leading value market for US beef in 2011, at 191,047 metric tons. Mexico was the volume pacesetter at 256,938 metric tons, up 4 per cent from 2010.

Exports to Japan increased 27 per cent in volume to 158,646 metric tons, while exports to Korea reached 154,019 metric tons.

Despite the positive growth in 2011, Nelson believes there will be a drop in exports for 2012 because the US will have less beef available to export, due to the dramatic tightening of the cattle supply.

Japan Is Export Wildcard

Nelson notes that Japan is the wildcard for US beef exports.

"At one time, before the first case of BSE at the end of 2003, Japan was a big, big customer. They bought almost a billion pounds out of our 2.5 billion pounds of beef exports," he said. "Since 2007, they have had a very restrictive export requirement. While South Korea is taking beef from cattle aged under 30 months, which only requires a mouth check in the packing plant to determine age. Japan has a much more restrictive system - 20 months and under with lots of paperwork."

However in fall 2011, it was announced that Japan was considering changing its import policy back to the under 30 months of age. Nelson noted that within two weeks of the announcement, the US had a $5 jump in cash cattle prices, creating a lot of excitement in the market.

"If Japan did start this in second quarter, they could start buying beef in the third quarter," he said. "They won't go up the full previous levels, but they could make a moderate 30 to 40 per cent jump."