Beef demand continues to rise
In 2022, global beef imports could rise three times higher than global beef production, highlighting growing meat demand in major Asian markets such as China. According to the USDA, global beef production could rise by 1% YoY, reaching 58 million mt, while global beef imports for the year could increase by 2.7% YoY, to about 10 million mt. Another factor leading to a shift in the global beef landscape is the impact of the ASF outbreak in China. The outbreak occurred in mid-2018 and led to the slaughter of thousands of pigs, generating limited hog production in the country. This mass slaughter led to a rise in the demand for pork and other protein sources such as beef to satisfy China’s local meat consumption.
Global beef demand reached 7.6 million mt in 2017 before the ASF crisis and is forecast at 10.1 million mt this year. On the other hand, beef production has grown at a far slower rate, rising by a meager 500K mt in the same period. This rise in demand can be attributed to China, accounting for 12% of the global beef demand in 2017 to a projected 32% in 2022.
Approximately 30% of China’s pig herd was slaughtered in two years (2018 - 2020) due to the ASF outbreak, resulting in a production shortage of about 18 million mt by 2020. Before the outbreak, China produced about 54 million mt of pork, with the majority of it consumed locally and about 1.5 million mt exported. However, by 2020, Chinese domestic production had dropped to about 36 million mt, resulting in the country importing other protein alternatives such as beef.
Market Outlook
According to the FAO, Chinese beef consumption could reach 10 kgs per capita by 2030, rising from 7 kgs per capita which are currently consumed. As a result, Chinese imports will continue to rise to meet the country’s growing consumption as production fails to sustain the rising demand and cannot compete with imported beef in price and quality. In 2022, China could purchase 3.25 million mt of beef, a 10% rise YoY, and more than double the volume imported in 2018 (1.4 million mt).
Global beef production is forecast to recover this year, led by Australia and Brazil, two leading global beef exporters. According to the USDA, after two years of stagnation, global beef production is forecast to grow by 600K mt in 2022. Australian beef production could rise by 200K mt to 2.1 million mt, with Brazilian beef production set to rise by 400K mt owing to the normalization of trade operations with China. Despite this growth, beef demand remains high, and beef prices could remain elevated.
Sources:
- El Pais. “In 2022, the demand for meat will continue to grow at a faster rate than the supply.”
- Pig Progress. “World pork trade reached new peaks in 2016 and 2017.”
- FAO. “Meat.”
- Meat and Livestock Australia. “Global beef industry and trade report.”
- USDA. “Livestock and Poultry: World Markets and Trade.”
- Trading Economics. “Beef.”
- OECD Library. “OECD Agriculture Statistics.”