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Angus Journal

Copyright © 2014
Angus Journal


Global Beef Trends

Brett Stuart offers CattleFax outlook on global beef production, demand.

NASHVILLE, Tenn. (Feb. 5, 2014) — Global beef production for 2014 will remain steady, continuing the trend of the last several years, said CattleFax analyst Brett Stuart as he addressed attendees at the CattleFax Outlook session Feb. 5 during the 2014 Cattle Industry Convention in Nashville, Tenn.

The growing world population and its growing income will drive global protein consumption. For perspective, Stuart pointed out that 78 million people — the equivalent to nine New York Cities — are added to the planet each year.

Brett Stuart

Consumer demand for beef in China is real and price is going through the roof, said CattleFax analyst Brett Stuart. “They are paying the same price for beef that we do in the U.S., and most Chinese have one-sixth the income.”

With the exception of India and Brazil, which are seeing some slight increases in their red-meat production, Stuart said global beef supplies have “pretty much flatlined.” Meanwhile, pork and poultry production are seeing growth. However, Stuart said the outlook for pork in 2014 remains to be seen as the porcine epidemic diarrhea virus (PEDv) is “wreaking havoc” on that industry and its production.

On the global scene, Stuart said China is influencing nearly all ag markets in a big way — and that will continue. Of the export growth potential in their market, Stuart said, “The Chinese middle class of 300 million will expand to 640 million by 2020, which is only six years away.”

Consumer demand for beef in China is real and price is going through the roof, Stuart said.
“They are paying the same price for beef that we do in the U.S., and most Chinese have one-sixth the income.”

Along with China, Hong Kong and Vietnam are also big beef markets. Brazil, India and Australia currently lead in beef exports to these countries. The United States is fourth, and the market for U.S. beef remains closed in China. Will that change? Stuart said the Chinese market supposedly opened in 2006, but no plans have ever been approved.

“It’s a tough process,” he said. “If we hear an announcement, it could still take time to work out details.” In the meantime, he noted, Hong Kong remains a strong buyer of U.S. beef.

The U.S. beef market to Russia also remains closed. Said Stuart, “I assume that won’t change.”

Stuart emphasized that adding an average $307 per head, or 21%, to the value of fed cattle, export markets are important for helping to add value.

However, the current industry scenario of tighter lean beef supplies and solid global beef demand has created a scenario that Stuart described this way, “The rubber band between supply and demand is stretching very tight.” Still, CattleFax projected the 2014 export and import forecast should remain stable.

Looking to the future, Stuart summarized that the global situation will be influenced by emerging Chinese policies, expansion of the U.S. cow herd and the global economy, as well as pork and poultry supplies and impending trade issues, such as mandatory country-of-origin labeling (mCOOL) and the beta-agonist ban.

Stuart said he is also watching the Trans-Pacific Partnership (TPP) agreement, which he said could be huge, especially because it would bring Japan to the table to discuss equalizing trade.

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