United States-Beef production forecast to drop over next 5 years.

US beef production to fall, exports and imports up – USDA

The liquidation of the US cattle herd is forecast to continue over the medium term, constraining production and increasing demand for imported beef, according to the latest United States Department of Agriculture (USDA) Agricultural Projections to 2018. However, despite falling US production through to 2012, US beef exports are forecast to increase over the same period, boosted by a lower US$ and reducing available US beef supplies for the domestic market.

According to the USDA, the US will export an increased proportion of beef production through to 2012, assuming a gradual recovery in shipments to both Korea and Japan. Imported demand for Australian beef from the US is also anticipated to increase. US beef exports between 2008 and 2012 are forecast to increase 30%, to 1.08 million tonnes. Imported beef volumes are forecast to rise by 15% over the same period, to 1.28 million tonnes by 2012. By 2018, US beef imports and exports are forecast to reach 1.45 million tonnes.

While the difference between lower US beef production and increased exports through to 2012 will be partially offset by higher imports, US beef consumption is forecast to decline 4% between 2008 and 2012. Consumption is then anticipated to slowly expand between 2013 and 2018, driven by population increases, reaching 12.7 million tonnes in 2018 – although per capita consumption will be 10% below 2007 levels, at 26.7kg/head (retail weight).

Given the tighter production and increased export demand, US cattle prices are forecast to increase steadily throughout the projected period. According to the USDA, Choice steer (Nebraska) prices are forecast to average 4% higher in 2009, at US$96.75/cwt, increasing to US$106.55/cwt by 2012, and peaking at US$110/cwt in 2014.