Page 21 - Beef-Week-2022

Stock Journal Beef Week | 2022

US beef ows to ease but China still

rmly in their sights

By SHAN GOODWIN

USTRALIA’S tight
cattle supply has
Aprotected export
beef prices from the
downward pressure that
would otherwise have
hit hard on the back
of United States herd
liquidation and ensuing
heavy beef supplies.
The main concern has
been the longer-term
consequences of the big
ground the US has made
in China, particular in the
high-end space.
With contraction in
US beef production
now forecast for 2022,
that space will be a key
watch area for Australian
exporters, along with
how demand in the US
itself settles as pandemic

in uences change.
So say animal
protein experts at big
agribusiness lender
Rabobank, whose latest
global beef quarterly, CYCLES: The US herd liquidation happened at the right time for Australia, when our beef supply has been short.
released today, hones Production in the US is now set to start contracting.
in on the implications
of the US moving from meant its export markets However, the contracting but still restricted travel-
becoming a net importer have had to keep pace US production - Rabobank wise, are looking to spend
to a net exporter. price-wise and that has says to the tune of 2.5pc on luxury goods, including
Rabobank expects US relieved some of pressure next year - should keep high quality beef,”
beef exports to double of Australia’s high cattle prices rm and set a Mr Gidley-Baird said.

in 2022. Markets in prices, Rabobank’s senior benchmark in the global “This is very much the
Japan, South Korea, animal protein analyst market. case in the US, however we
Mexico, and Canada Angus Gidley-Baird said. are conscious of the fact
will remain strong but Australia remains Precursor a lot of US demand been
the growth in exports competitive in China. Cattle prices around the driven by scal stimulus

to China is driving Rabobank’s latest gures world continue to creep up and travel restrictions.
the increased export show in October US frozen in the face of tight supply “The question is will
volume. beef was selling in China and strong demand, much they go back to old habits
Earlier this year, for US$8952 a tonne, of it still pandemic-driven, or continue to be willing
volumes to China lifted compared to Australian Mr Gidley-Baird said. to pay what they currently
above 19,000 tonnes, product at US$6833/t. Brazil is the one key are for food, and meat in
propelling it to the third Fresh chilled beef from exception, with reduced particular?”
largest export destination the US was US$15369/t, access to China leading And as tight as the 2022
for the US, and since then against Australia’s to falling prices through beef market appears, it
volumes have continued US$13320/t. September. may just be the precursor
to rise. Of course, packers Analysts are forecasting to a bigger event in 2023,
Australia’s tight in the US posted huge the global beef market the Rabobank report said.
supplies, and disruptions per-animal margins this to tighten further in 2022 Contracting US
from Argentina and Brazil, year where Australian and against a backdrop of production is not
along with the growing processors have been in ongoing strong demand, expected to reverse until
demand for high-quality negative pro t margin that augurs well for prices. 2023 or beyond, and

beef in China, have territory. The demand story, limited export supplies
supported US export The US export expansion however, is complex. from Australia will be
growth, Rabobank said. into China is set to stay, “It is still very much ongoing until at least then,
Still, the phenomenal according to Rabobank, pandemic related but has Mr Gidley-Baird said.
demand for beef on US as it is meeting China’s shifted to being driven by “Global beef markets are
home soil, related to growing demand for lockdown exits - people on a distinct tightening
pandemic upheaval, has higher-quality beef. with disposable income, trend,” he said.
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