Read the latest beef market news - 27 July 2016
Australian beef exports to the US in 2014 increased 87% from 2013, to 397,889 tonnes swt. The year-on-year growth in exports to the market were assisted by strong demand for manufacturing beef, as the US domestic lean beef supply was tight throughout the year. The 60 year low cattle herd, including cow and calf crop, resulted in reduced cattle slaughter during 2014.
Frozen grassfed beef continues to make up a majority of Australian beef sent to the US. However, chilled beef exports have been on the rise for the past decade. Chilled grassfed beef exports increased 89% year-on-year in 2014, to a record 63,107 tonnes swt.
Manufacturing beef made up 70% of total Australian beef exports to the US in 2014.
US beef quota
Australia exports beef to the US under a tariff rate quota of 418,214 tonnes in 2016. In 2015, Australia used 99% of its tariff rate quota. Australia was the largest source of imported beef in the US in 2015. As at 18 July 2016, import entries of Australian beef had reached 152,165 tonnes swt - 31% less than the same time last year, and 36.4% of the annual quota, so far.
Steiner Consulting Group US market report
Read the latest US beef market news - 27 July 2016
US cattle industry - fast facts
The US cattle herd has now started to expand after a number of years of contraction, with numbers as at 1 January 2015 rising to 89.9 million head. The US cattle herd remains the fourth largest in the world (following India, Brazil and China).
The US is the world's largest beef producer, producing 10.8 million tonnes cwt of beef in 2014.
US per capita beef consumption has been in decline over the last few decades, and was estimated at 35.1kg per capita in 2014.
Prior to the discovery of the first case of BSE in the US in December 2003, the US was one of the world's largest beef exporters. For years following this time, US exports have remained at relatively low levels until 2011, when US beef exports reached a record high. US beef exports in 2014 reached 816,074 tonnes swt - one of the largest annual totals on record, but well below the 2011 high of 882,818 tonnes swt.
The US remains one of the world's largest beef importers. In 2014, US beef imports reached 957,398 tonnes swt – the largest volume since 2005.
Canada is Australia's 8th largest beef export market (in terms of volume), with shipments in 2014 reaching 32,972 tonnes swt, valued at A$163 million FOB. The recent growth in exports to Canada have been assisted by strong demand for manufacturing beef, as Canadian cattle slaughter declined.
Frozen grassfed beef makes up the majority of Australian beef sent to Canada. Australian manufacturing beef exports to Canada made up 76% of total Australian beef shipments to Canada in 2014.
Canada’s beef quota
Australia exports beef to Canada under a tariff rate quota of 35,000 tonnes swt in 2015. Australia was the second largest source of imported beef in Canada in 2013, following the US and ahead of New Zealand. Australia is expected to be a more prominent supplier in the Canadian market in 2014, although volumes will remain below the 35,000 tonne tariff rate quota.
Steiner Consulting Group Canada market report
Canada’s cattle industry - fast facts
The Canadian cattle herd, as at 1 January 2015, was estimated to be the lowest it has been in over 20 years, at 11.915 million head.
Canada is the world's 11th largest beef producer, producing 1.075 million tonnes cwt of beef in 2014. Total cattle slaughter was 3.167 million head in 2014.
Canada’s per capita beef consumption was estimated at 27.8kg in 2014.
Beef exports from Canada in 2014 increased 13% from 2013, to 266,547 tonnes. The large increase in demand for beef in the US, and similar improvements in major north Asian countries, drove the growth in trade last year.
Canada is the second largest supplier of live cattle to the US (following Mexico). Canada exported 1.25 million live cattle in 2014 - most to the US. Most of the live cattle exported to the US in 2014 were feeder cattle, followed by slaughter steers and heifers, and slaughter cows.
Canada’s beef imports in 2014 decreased 22% to 136,007 tonnes. Australian beef imports were the only category to increase in 2014, and were more than offset by large drops in supplies of US, New Zealand and Uruguayan beef.
Mexico is a small market of Australian beef, with shipments in 2014 registering 870 tonnes swt, valued at about A$5.3 million FOB. Shipments to Mexico were predominantly thin flank.
The opportunity for Australian beef exports to Mexico is positive in the medium to long-term, underpinned by an expected fall in Mexican beef production in the coming years, as Mexico is in the midst of a long-term cattle herd decline similar to the US.
Mexico’s beef import tariff
Australia exports beef to Mexico under a tariff of 20%-25%.
Steiner Consulting Group Mexico market report
Mexico’s cattle industry - fast facts
The Mexico’s cattle herd continues to contract, with numbers in 2015 falling 10% below year ago levels, to 17.12 million head – the smallest cattle inventory since 1963. Similarly impacted by the last two year droughts, the Mexico’s cow herd has undergone a long-term liquidation. This combined with the lower calf crop and a surge in feeder cattle exports to the US has exacerbated the tight cattle supply for Mexico in the medium to longer term.
Mexico is the world's 8th largest beef producer, producing 1.83 million tonnes cwt of beef in 2014. Approximately six million cattle were slaughtered in Mexico in 2014.
Mexico is a relatively small beef exporter compared with the US and Canada. In 2014, Mexican beef exports rose 17% on the previous year, to 137,170 tonnes swt - largely driven by increased demand for beef in the US, which has increased its imports from most major suppliers.
Mexico is the largest supplier of live cattle to the US. In 2014, Mexico exported 1.176 million head of live cattle, predominantly to the US. Mexican feeder cattle account for approximately 5-6% of all cattle on feed in the US, although this can be as high as 11-12% on occasion.
Mexico’s beef imports decreased 12% during 2014, to 144,424 tonnes swt - essentially as a result of a drop in imports of US beef. There was an increase in supplies from Canada and Australia, but this was more than offset by the decline in the US beef trade.