W29: Beef Update

In W29 in the beef landscape, 2023 global beef production is expected to remain unchanged at 59.1 million metric tons (mmt) due to falling United States (US) production. The decline is expected to offset increases in Australia, Brazil, China, and India. Beef production outside the US is anticipated to rise by 1%, driven by elevated global beef prices leading to more slaughter. Australia's production is expected to grow by 10%, supported by greater feed availability and improved pastures. Brazil's production is forecasted to increase by 2% as packers slaughter more cattle amid lower calf prices and a firmer domestic market. China's production is predicted to rise by 3% as COVID-related restrictions are lifted, boosting food service demand. India's production is up by 2%, driven by export demand and marginally higher domestic consumption.

Global beef exports are forecasted to increase slightly in 2023 to 12.1 mmt as lower US exports are compensated by growth from Brazil, Australia, and India. Brazil is set to increase shipments to China, benefiting from reduced competition and a weaker Brazilian Real. Australia's exports are forecasted to rise by 13%, taking market share away from the US in East Asia. India's exports are expected to grow by 2% due to strong price competitiveness in key Southeast Asia and Middle East markets. In contrast, as the cattle herd contracted, US production and exports are forecasted to decline by 5% and 1%, respectively. The competition from increased Australian production further dampens the outlook for US exports.

The Mercosur Steer Index registered a USD 0.04 increase in W28, reaching USD 3.37/kilogram (kg) carcass. The slaughter strengthened in Uruguay (+7%) and Paraguay (+6%), while it remained stable in Argentina and experienced a USD 0.03 decrease in the average of the exporting states of Brazil. In Uruguay, the special steer price rose to USD 3.80/kg for meat, rebounding from W27's floor of USD 3.50/kg. Argentina claimed the second-highest price position at USD 3.77/kg. In Brazil, the average price in the exporting states was USD 3.08/kg/hook, with the Brazilian real's appreciation against the US dollar preventing a further drop in dollars. Campo Grande in Mato Grosso do Sul recorded a USD 3.28/kg reference. Paraguay marked a second consecutive week of price recovery, reaching USD 3.50/kg.

Lastly, Tridge’s analysis indicates that South Korean beef imports (excluding derived products) reached 257.3 thousand metric tons (mt) in the first half of 2023. This is an 8% year-on-year (YoY) increase and the highest volume on record for a January to June period. However, the average import price in H1-23 declined by 18% compared to the same period in 2022, reaching USD 7.52/kg. Despite the price decline, the import volume rose by 6% over the five-year average. Beef export value declined by 12% YoY to USD 1.9 billion due to the decrease in the average price. The US remained South Korea's primary beef market origin, with 136.5 thousand mt imported, up by 6% YoY, despite lower US production. On the other hand, Australian imports surged by 16% YoY, reaching 97.2 thousand mt, driven by Australia's growing beef production as cattle numbers increased. The US and Australia comprised 91% of South Korea's total beef imports. Beef imports from other regions decreased 9% YoY, mainly due to Australian production recovery. The solid growth in South Korean beef demand is expected to continue, with a projected 1.6% YoY increase in total beef and veal imports for 2023. Australia is expected to gain more market share as US beef production declines.