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U.S. Beef in the Global Marketplace

CattleFax analyst explains how India and China affect global demand for U.S. beef.

by Kasey Brown, associate editor

NASHVILLE, Tenn. (Feb. 4, 2014) — Tight supplies mean high beef prices, especially with growing global demand for beef, Brett Stuart, CattleFax global market specialist, told attendees of the 21st Cattlemen’s College® at the 2014 Cattle Industry Convention in Nashville, Tenn., Feb. 3-7.

Export levels in 2014 are expected to remain steady with record 2013 levels, an even more impressive feat since supplies will continue to tighten until 2016, Stuart noted. “New demand” from burgeoning populations in several Asian countries is straining the beef supply, but will support high prices. The current population boom is like the equivalent of adding the population of New York City nine times every year. However, global beef production is relatively stagnant, which creates a “highest bidder” situation.

Politics do and will continue to influence beef trade, especially in terms of access. China still has not opened its borders to U.S. beef since 2003. Though rumors indicate it will open in July of this year, Stuart predicted that trends indicate plant approval or export certificates would be very slow to occur, if they do at all. China currently uses a feed-additive ban to restrict U.S. beef, so U.S. beef exports for the area are sent to Hong Kong. China is on the cusp of making difficult decisions involving strategic food crops and import policies.

China is self-sufficient in food, but just barely. Stuart added that the self-sufficiency rates are not sustainable. If China starts importing even 1% of the country’s meat demand, the tonnage of product needed would be massive. He emphasized that current food policy in China is ambiguous. An example is the Chinese government uses food inflation to keep poorer farmers from moving into the cities because agricultural products are needed.

India has the highest concentration of beef cattle in the world, with more than 300 million, though Brahman cattle are sacred to Hindus. The beef industry in India focuses on water buffalo in Muslim states, and buffalo consumption is increasing on a global scale. Meat consumption on a whole is very low, but their exports are very lucrative. However, the markets for Indian beef do not compete with U.S. beef.

Additionally, foot-and-mouth disease (FMD) concerns in India limit access to many of the U.S. export markets. Mandatory vaccination is under way, but due to bovine living conditions in India, the prospect of eliminating the disease is very slim, he said.