W5: Weekly Beef Update
Live Beef
US: Live Cattle Futures Steady to Weak (Jan 30)
Live cattle futures were steady to weak in range-bound trade, with light activity in the cash market hanging over prices. CME February live cattle settled unchanged at USD 3,455.19/MT (156.725 cents per pound), and most-active April was up 0.3 cent to USD 3,545.58/MT (160.825 cents per pound). April live cattle futures posted a weekly gain of 0.6%. CME March feeder cattle futures gained 0.625 cents to settle at USD 4,044.93/MT (183.475 cents per pound).
US: Cattle Confinements in Pens Fell by 8% in December (Jan 31)
United States feedlot cattle with a capacity of 1K head or more totaled 11.7M head as of January 1, 2023, down 3% from the same month a year earlier. Placements or confinements during December totaled 1.8M heads, 8% less than in 2021. On the other hand, cattle sales during December totaled 1.74M heads, 6% less than in 2021.
US: Beef Herd Falls to Lowest Since 1962 (Feb 1)
The US beef cow herd dropped to its lowest level since 1962, US Department of Agriculture (USDA) data showed on Jan 31, after a severe drought raised costs for livestock feed. Ranchers increasingly sent cows to slaughter last year, instead of keeping them to reproduce, as dry weather reduced the amount of pasture available for grazing in the western United States and on the Plains. At the same time, a tight labor market limited slaughtering at meatpacking plants. Declining supplies of cattle are expected to keep meat prices high for consumers, analysts said. There were 28.9M beef cows as of Jan. 1, down 3.6% from a year earlier, the USDA said. It was the smallest herd size for that date in 61 years, according to US government data. Overall the total number of cattle and calves across the country fell 3% from a year ago to 89.3M, the lowest since 2015, government data show. A significant shift toward wetter weather will be needed to break the trend of liquidating cow herds, Rabobank said.
Australia: Cattle Price Remain Firm and Slaughter Numbers Increase in W4 (Jan 30)
As of January 27, 2023, the Eastern Young Cattle Indicator (EYCI) remains stable at USD 5.58/kg cwt (Carcass Weight) in Australia which was USD 0.71 higher than at this time in W3. These cattle prices appear to be at a level that is more palatable for the meat industry, with an increase in weekly slaughter numbers to 99,206 heads from 82,070 heads in W3.
Australia: Cattle Stock Recovered to 2014 Levels (Feb 1)
The number of cattle in Australia is currently 28.8M, the highest since 2014. After three years of unstable seasonal conditions, as well as the 2019/20 drought, Australia's cattle stock has begun to recover and has already reached 2014 levels. It is reported that the country will continue to increase the number of livestock. By 2025, the number of cattle is expected to reach its highest level since the 1970s. Its number will grow by 4.5% and amount to 29.6M heads. Experts attribute such trends to the strong reproductive characteristics of heifers, genetic improvements in all herds in the country, and rational livestock management. Analysts predict that the total beef production in 2023 will reach 2.087M MT, which is 119K MT more than last year. Beef exports will also rise to 1.49M MT, up 110K MT from 2022. It is expected that in 2024 exports will continue to grow and reach 1.598M MT.
Australia: Beef Herd Will Reach Its Highest Level Since 2014 With 28.8M Head (Feb 5)
In 2023, the Australian beef herd will reach its highest level since 2014 with 28.8M head, increasing 1.1M, up 4.5% per year. Growth will slow in 2024 and 2025, rising 1.8% and 0.8% respectively to fully mature at 29.6M head and then taper off in subsequent years, Meat & Livestock Australia said in its projections published in W5. Record retention of females for 15 consecutive months, coupled with above-average weaning rates, has led to an increase in calf production, which bodes well for supplies to increase substantially in 2023, both for replacement cattle as destined for slaughter. Slaughter capacity, affected by the availability of skilled and unskilled labor, will be the key determinant of adult cattle slaughter in 2023. If capacity can be increased through improved labor availability, it is anticipated that slaughter will reach 6.625M head this year, an increase of 7.7% representing 475K head, over current estimates for 2022. Australian beef exports are projected at 1.014B MT shipping weight this year, an increase of 160K MT compared to 2022 and will continue to grow in 2024.
Netherlands: Mad Cow Disease Discovered in One Cow in the Netherlands (Feb 1)
A case of mad cow disease has been discovered on a farm in the Netherlands, Dutch newspaper De Telegraaf has reported. The country’s minister for agriculture Piet Adema has told the Dutch parliament that the case of mad cow disease, or bovine spongiform encephalopathy (BSE), was discovered in a dead cow in W5. It is understood that the location of the farm was not specified, although De Telegraaf reports that it is located in the province of South Holland.
The Ministry of Agriculture, Food and Rural Affairs announced on Feb 2 that it would suspend import quarantine for Dutch beef following a report of atypical bovine spongiform encephalopathy (BSE) at a farm in the Netherlands. The Ministry of Agriculture, Food and Rural Affairs confirmed that atypical bovine spongiform encephalopathy had occurred in a dairy cow farm in Zuid-Holland in the southwest of the Netherlands. These cows were discarded and not supplied to food companies. Atypical BSE is a very rare naturally occurring disease, mainly in elderly cattle over 8 years of age, and does not spread to other animals. This differs from formal BSE, which is transmitted through contaminated feed. Accordingly, the World Organization for Animal Health (WOAH) recommends that beef trade be not affected in the case of an atypical BSE outbreak. The Ministry of Agriculture, Food and Rural Affairs has requested epidemiological information about this atypical BSE outbreak from the Dutch government, and based on this information, it will decide whether to resume quarantine after determining whether there is a risk to public health. Last year, Dutch beef imports amounted to 79MT, accounting for 0.02% of total imports. No beef was imported from the Netherlands in 2022.
Poland: The Increase in the Cattle Population Is Accompanied by an Unfavorable Trade Balance (Feb 1)
According to data from the Central Statistical Office, the cattle population in Poland at the end 2022 amounted to 6.448M pieces and it was 69.5K units (by 1.1%) higher than in the corresponding period of 2021. In turn, in the June 2022 statement, in the second half of the year there were only 4.2K pieces (0.1%). The number of calves under 1 year old increased by 7.0% compared to December 2021, and by 0.7% compared to June 2022, reaching 1.928M pieces. In turn, in the age range of 1-2 years, the herd of young cattle decreased by 11.3%. compared to the same period of the previous year, while compared to June 2022, an increase of 1.5% was recorded reaching the level of 1.698M pieces. The stock of cattle aged 2 years and more increased by 6.0% compared to December 2021, and decreased by 1.2% compared to June 2022, reaching the level of 2.821M pieces.
Brazil: The Price Gap Between Males and Females for Slaughter Is a Record (Feb 1)
The average difference between the prices of ready-to-slaughter male and female animals, both sold in the São Paulo market, reached its highest level at the beginning of 2023. According to data from Cepea, the difference between the average values is an expressive USD 4.50/@ (R$ 23.48) in the first three weeks of January (until the 24th), with an advantage for the male. This is the largest difference in Cepea's monthly historical series for these categories for the first month of the year, which began in 2000 in the case of cows. This scenario is due to the maintenance of male prices, while those of cows fell. From 12/22 to the partial of this month, while the @ del boi gordo in the São Paulo market presents a nominal devaluation of 2.7%, the price of the cow registers a fall of 4.31%. According to Cepea researchers, in the case of males, the values are based on the strong international demand for meat, especially from China.
Argentina: Drought Is Starving Cattle (Jan 31)
The prolonged drought is causing severe losses to livestock and crops in Argentina. In some regions, it has hardly rained in the last three years. This is due to the La Niña weather phenomenon. In Santa Fe province, authorities estimate that about 3K cows have already died. About 26M cows are at risk, which would represent about half of the entire Argentine cattle population.
Argentina: Strong Rise in Argentina Impacted the Mercosur Steer (Feb 1)
The average value of the steer in the Mercosur countries jumped in W5 due to the strong appreciation of Argentine prices. The Mercosur Steer Index rose 10 cents to USD 3.49kg carcass, the highest value since early October. The lack of supply of finished animals in Argentina caused the price of the export steer to rise 42 cents to USD 4.05/kg carcass.
Argentina: The Rise of the Steer in Argentina Overshadowed Any Other Market (Feb 5)
The heavy and traced steer is trading at USD 4.32, no less than 60 cents more than in the previous week. In this way, it maintains its status as the most expensive regional steer but considerably more extensive. In four weeks, it accumulated an increase of 28% in pesos (22% in dollars), still far from the 38% that increased the consumption rate, so subsequent increases must not be ruled out. In Brazil, the fat steer is paid USD 3.81, 14 cents more than seven days ago. An appreciation of the category in reais and a revaluation of the currency against the dollar had an almost equal influence, going from 5.18 to 5.09. Exports in January accumulated 160K MT, 16% more YoY. They also managed to exceed the lowest levels recorded in November and December. The median price, at USD 4,850, lost USD 100 in 30 days and is the lowest monthly drop since the June record, from when it fell USD 2K.
Argentina: About 50% Of the National Cattle Stock in Argentina Are Affected by the Drought (Feb 5)
According to the measurements carried out by the Information System on Droughts for the South of South America (SISSA), the situation as of January 10 shows that close to 50% of the national territory is under different degrees of drought, something that, in terms of of cattle stock would involve 80% of the 54.4M heads that make up the national herd. It is worth mentioning that the drought categories used by SISSA for its monitoring are calculated based on percentiles of accumulated precipitation taking the 35-year period between 1982 and 2016 inclusive as the reference period. Based on these percentiles, a drought category is assigned according to the specifications of the United States Drought Monitor that indicate four degrees of drought of increasing severity, light orange “moderate drought”, orange “severe drought”, red “extreme drought” and finally embroidered "exceptional drought."
Uruguay: Delays Vaccination Against Foot-And-Mouth Disease Due to Drought (Jan 31)
Due to the drought and its effects, the General Directorate of Livestock Services of the MGAP resolved that vaccination against foot-and-mouth disease of all categories be carried out during March and April. The Minister of Livestock, Agriculture and Fisheries, Fernando Mattos, had advanced the initiative in an interview with Rurales El País and the general director of Livestock Services, Diego De Freitas, confirmed that the Resolution will be published throughout this week.
New Zealand: Local Sale-Yard Prices of Meat for W4 (Feb 3)
Farmers kept their livestock in reserve since plenty of grass was available for ideal grazing conditions, hoping for higher farmgate prices. The drop in supply caused most prices to start to increase in W4. Here below are the export price trends for the W4 prices vs. Week 3 prices:
Steer NI P2, 300kg - W4: USD 3.73/kg (NZD 5.75/kg) vs. W3: USD 3.73/kg (NZD 5.75/kg) - 0.0% unchanged
Export Bull, USA - W4: USD 5.26/kg (NZD 8.12/kg) vs. W3: USD 5.20/kg (NZD 8.03/kg) - +1.1% increase.
UK: Welsh Farmers Remain Frustrated Over Bovine Viral Diarrhea Legislation Delay (Feb 2)
The need for a Wales-wide legislative approach to BVD control was outlined in a recent written statement by the Welsh government. The Minister for Rural Affairs, Lesley Griffiths, said that a national coordination was required for widespread BVD eradication. Wales' previous Gwaredu BVD scheme, which launched in 2017 but ended in December 2022, had seen over 83% of the cattle herds screened for BVD. The voluntary program had identified over 1K Persistently Infected (PI) animals in Wales. However, the Farmers' Union of Wales (FUW) has warned that any gains made during the voluntary phase could be lost if there was a significant gap between the end of Gwaredu BVD and the onset of new legislation.
Morocco: Ships of Slaughtered Cows Imported From Brazil and Uruguay Will Arrive Within 10 Days (Jan 31)
It is expected that ships loaded with cows destined for slaughter will arrive from Brazil and Uruguay within 10 days, "which will contribute to stopping the series of high prices for red meat." The graph line for red meat prices has been trending towards an increase in recent times. According to a number of professionals in the red meat sector, the current circumstance in which the latter lives is moving with the price of meat towards exceeding the ceiling of one USD 9.71 (100 dirhams) soon. Others also believe that in the month of Ramadan and Eid al-Adha, they will see unprecedented heights.
Morocco: Extension of the Suspension of Tariffs to Import Cattle (Jan 31)
The Government of Morocco decided to extend on Jan 30, the suspension of tariffs on imports of all cattle regardless of their weight, to deal with the shortage of these animals due to the drought and lower the price of red meat in the Maghreb country. The Customs and Excise Administration published a circular in which it extends the suspension of the collection of import duties applicable to cattle to all domestic cattle regardless of their weight.
Fresh Beef
Global: Beef Demand Plummets in 2022 (Jan 30)
Last year, the demand for beef in the world fell sharply. In 2023, a decrease in the consumption of this type of meat is also predicted. According to the agency, Bloomberg, demand is also decreasing in those countries where beef is eaten most often. For example, in Argentina, where in 2007 per capita consumption was 68.7 kg per year, by 2022 it had dropped to 47.2 kg. This year, demand may lose another 2%. This dynamic is associated with rising prices in the country, which is why Argentines have begun to consume broiler meat more often, it has seen an increase from 18 kg to 46 kg per year. In addition, according to Bloomberg, beef consumption decreased last year in Brazil, the US and the UK. US beef purchases are down 4% in 2022, according to NielsenIQ data. US beef demand is projected to fall by almost 5% this year, while in the UK, beef purchases from grocery stores and restaurants are already down 5.8% from the previous year, sales of processed meats are down 22%, steaks are down by 19%.
South America: Increase in China’s Dependence on Beef (Feb 3)
South America is increasingly dependent on a single beef market. Last year, China had 53.3% of the volume of all Brazilian meat exported. The Chinese share of revenues was even higher, at 61%. The Argentine situation is even more concentrated. Last year, 77.6% of the volume of chilled, frozen and processed beef sent abroad was destined for the Chinese market, according to the IPCVA (Institute for the Promotion of Beef of Argentina). The situation in Uruguay is not very different. In the first three weeks of January, the Chinese bought 54% of the beef exported by the country, according to Inac (National Meat Institute). The scenario should not change much this year in the region, probably with Brazil gaining an even larger share of the Chinese market.
US: Beef Headed For Supply Shock and High Prices Through 2024, Gro Expects (Feb 2)
Heightened beef demand, the US’ shrinking cattle herd, and drought-related feed input cost pressures point to a tightening in US beef supplies and elevated prices into 2025, a new Gro analysis shows. A dwindling herd is signaling that US beef prices are about to return to the records held through 2021, a year when wholesale beef averaged above USD 280/cwt. Additionally, as heightened demand has increased what consumers are willing to pay for beef, supply constraints could lift prices even higher. Prices for the choice beef cutout, a proxy for US beef prices, are currently averaging just under USD 280/cwt, on a par with last January as well as average prices for 2022. For much of last year, choice beef cutout prices mildly declined when ranchers liquidated their inventories as pasture land in Western states dried up and as cattle feed costs stayed at elevated levels. From July-Dec 2022, US cow slaughter, which reflects female cattle raised as breeding stock, rose 7% compared with the same period in 2021, marking the largest cow slaughter since 2011.
US: State Department Official Confirms Clearance for Paraguayan Beef Moving Forward (Feb 3)
Negotiations for Paraguayan beef to land in the United States are at an advanced stage, US State Department Director for Brazil and Southern Cone Affairs Baxter Hunt told Deputy Foreign Minister Raúl Silvero Silvagni in Asunción. Both diplomats held a meeting, during which they reviewed the bilateral agenda, in which the opening of the US market for Paraguayan meat was one of the main topics, according to Última Hora. Hunt and Silvero highlighted the good bilateral relationship between both countries, which, according to them, is characterized by the coincidence of fundamental principles and values. They also reiterated the importance of international cooperation in defense and security matters.
Australia: Beef Meat Exports Review for 2022 (Jan 30)
Beef exports totaled 854.60K MT swt for the year, 4% less than in 2021 and the lowest total exports since 2003. Export volumes declined in most major markets, with Japan and the US down 8% each, Southeast Asia and Middle East North Africa (MENA) down 6% and South Korea down 3%. The exception was China, where beef exports grew 7% to 158K MT in the year. Despite this, high demand has led to strong prices for beef exports. Prices peaked in June at USD 8.55/kg (A$12.07) and averaged USD 7.86/kg (A$11.09) in the year to October, meaning that, by value, Australian exports had their biggest year since 2019, even as supply was substantially lower. These high prices came from some of the strongest competition ever seen in Australia's largest markets. As the liquidation of the American herd deepened, cheap American beef flooded into Japan and South Korea, giving the US its biggest market share in 20 years in both markets. At the same time, Brazilian exports have increased massively to become the top supplier of beef in China, now solidly the largest importer of beef in the world. Australian exporters responded by emphasizing what makes Australian beef different, especially in terms of product traceability, consistency and taste. This has allowed Australian beef to maintain a premium image in the global market, even with limited supply.
Ireland: Minister Urged to Ensure Commercial Beef Value (CBV) Is Displayed on Mart Boards (Jan 31)
Minister for Agriculture, Food and the Marine, Charlie McConalogue has been urged to ensure that the Commercial Beef Value (CBV) of all calves is displayed on mart boards. The beef chair of the Irish Cattle and Sheep Farmers’ Association (ICSA), Edmund Graham said there are “significant variations” in efficiency and cost effectiveness when it comes to finishing animals depending on their CBV. Despite being launched by the Irish Cattle Breeding Federation (ICBF) in December 2021, and assurance that the CBV would be displayed on mart boards in time, this hasn’t happened, he said. The CBV is a tool for non-breeding beef farmers which allows for better insight into an animal’s genetic merit, according to the ICSA beef chair.
France: Forecasting a Reduction in Beef Production in France for This Year (Jan 31)
French beef production is expected to fall in 2023 for the third consecutive year, according to the Institut de L'Elevage IDELE. The reduction in dairy cattle herds and in breeders over the last six and a half years is, in fact, limiting the availability of all categories of cattle. Consumption practically stable at -0.5% would lead to a continued rebound in imports. Weaned animal exports will fall as a result of the drop in the number of wet nurses. After a drop of almost -5% in 2022, slaughter cattle production should fall further in 2023 to 1.337M carcass equivalent tonnes, which would be 1.6% less than in 2022.
Brazil: Beef Consumption Plummets in Brazil, but Exports Grow (Jan 31)
International beef trade routes are in full transformation, in a scenario that began to take shape in 2022 and is expected to increase throughout this year. Highly meat-eating countries are reducing food consumption. On the other hand, nations that had a diet based on other types of protein, such as China, have expanded their participation in this market, expanding their import volumes. The scenario exposes a contradiction. Brazil is now considered one of the largest beef producers in the world, responsible for 24% of the entire volume exported globally, according to the USDA, the US Department of Agriculture. However, protein consumption among Brazilians, in the domestic market, reached in 2022 the lowest index of the last 26 years. In the last 5 years, the deceleration has accumulated a drop of 26.8%. The same phenomenon can be observed in other countries that are large consumers of beef and also registered a slowdown in domestic consumption in 2022, such as the United States (5% decrease), the United Kingdom (5.8% less) and Argentina (down 2%).
Brazil: Expects China’s Beef Consumption to Grow (Feb 2)
Demand for beef in China is expected to rise as the country still has relatively low per capita consumption, Reuters reported, citing Gilberto Tomazoni, chief executive of JBS SA, who spoke on Wednesday during a business conference. He said Brazil and the United States, where it has meat facilities, are well positioned to meet China's growing demand for beef as the major food importer reopens after COVID-19 restrictions. He added that China is competitive in chicken and pork production, since these have shorter cycles, while for beef there is a need for more land and the production cycle is longer.
Paraguay: Beef Exports to Georgia Grow (Feb 3)
In the 31 days of the first month of the year, Paraguay exported 893MT of beef to Georgia for a value of USD 2.9M. This figure exceeded the records of the last year, considering that at the end of 2022, 332 MT were shipped, which generated USD 1.1M. According to Senacsa data for 2022, Paraguay exported an average of 27MT of beef per month to the Georgian market for USD 52.52K from May to November, however, the volume of income and shipments took a big leap in December from last year. And it is so that from being in last place, in January of this 2023 Georgia occupied the seventh position in the ranking of the main destinations of the national red protein.
Paraguay: Exported More Meat but at an Average Price of 11.5% Lower in January (Feb 3)
In January, Paraguayan shipments of bovine meat to the different markets of the world had grown in tons, however, they registered a drop in billing, as a consequence of a devaluation of the ton of exported meat, according to data from the National Quality and Animal Health (Senacsa). According to the report, exporting refrigerators sold 22.96MT of beef in the first month of 2023, which means an increase of 8.9% compared to January 2022, when 21.73MT were placed. On the other hand, the invoicing for exports abroad was USD 106.1M, representing a retraction of 3.5% to the USD 110M reached in the same month of the previous year. The average price of the exported ton fell 11.5%, from USD 5.22K/MT in January 2022 to USD 4,62K/MT in January 2023. Chile remains the largest export destination with 9.99K MT of beef for a total of USD 48.9M. Instead, Brazil ranked second with 2.40K MT (USD13.1M), Taiwan with 2.27K MT (USD 10.5M), Russia with 2.16K MT (USD 7.7M), and Israel with 714MT (USD 4M), among other countries.
According to the latest data from Argentina's National Institute of Statistics and Censi (INDEC), Argentina's beef exports in 2022 totaled 631.99K MT with a total worth (FOB) of USD 3.45B. In YoY terms, these figures represent increases of 10.95% in volume and 24% in value. The higher growth in export value corresponds to a higher average export price of USD 5.47/kg, up 12% YoY. The growth in beef exports is notable considering that Argentina maintains restrictions on the export of several beef cuts to boost domestic consumption, which has fallen over the years due to economic pressures. China continued to top the export destinations for Argentinian beef, and further grew its market share. This is notable since growth came despite pandemic-induced restrictions for demand. Exports to China now represent 78% of the total volume of beef exported, at 491K MT, up 16% YoY, and 66% of the total value exported, at USD 2.27B, up 35% YoY. (Continue Reading)
Argentina: Price Decrease of Argentinian Beef Exports During December 2022 (Jan 30)
In Argentina, the average export value of beef during December 2022 reached USD 3,936/MT, a decrease of 6.3% compared to November 2022, and 29.26% lower than the average price of December 2021, which was at USD 5,579/MT.
Argentina: China Was the Main Destination for Argentine Meat in 2022 (Feb 2)
According to an IPCVA report, Argentine beef exports in December 2022 reached a value of approximately USD 186.4M, resulting in -27.8% to the USD 258.3M of December 2021. The average price for the month was -29.6% lower than that of the same month of 2021 and that of November 2022. (-6.2%). As a consequence of the negative trend in prices (-29.6% when comparing December 2021 and 2022), there was a 27.8% drop in the value obtained, although this decline was offset by the slight YoY expansion (+ 2.5%) of the volumes exported. The accumulated exports throughout the last year, between January 2021 and December 2022, were located in volumes close to 890K MT equivalent of beef with bovine meat and 93.7K MT of bovine bones for a value greater than USD 3.424M. The People's Republic of China was the main destination in volume during 2022, with approximately 485.7K MT, followed by Israel (31.1K MT), and Germany (23.6K MT).
Argentina: Regional Recovery of Beef Exports Expected (Feb 4)
This year's prospects for the international beef market are beginning to look more favorable after China, the world's largest importer, lifted its sanitary restrictions and prices rose a little more due to the shortage in recent months in the European market in general. It should be remembered that the measures applied by the Chinese government due to the COVID-19 outbreak drastically slowed down operations with countries in the region such as Argentina and Uruguay. On the other hand, he stated that as in China, there is also a change in trend in Europe where more positive perspectives are being presented. "We believe that this shortage that Europeans seem to have at this time causes prices to rise between 35% and 40% compared to the floors," she said. Taking stock of 2022 in regards to bovine meat, Riusech pointed out that Argentine exports were very positive with a volume per ton of around 900K MT approximately with a turnover of USD 1.5M.
New Zealand: Most of New Zealand’s Beef Still Goes to China in 2023 (Feb 3)
One of New Zealand's largest beef exporters is exporting 400x40ft containers per week, of which 80% is going to China and the USA. The USA is very particular about their meat cut's seeing that they use New Zealand's lean beef to mix in with US fatty beef for their hamburger patties. On the other hand, China is buying most meat cuts from New Zealand. This strong demand and aggressive procurement strategy make it almost impossible for other Asian countries to compete with the Chinese beef demand.
New Zealand: Aussie Beef to Stiffen Export Competition (Feb 3)
New Zealand beef exports have been enjoying less competition from across the Tasman for the past two years as Australian producers concentrated on rebuilding their beef herd amid favorable conditions. But, while overseas demand for beef remains positive, a lift in export competition from Australia is inevitable with likely implications for NZ beef. Australia’s rebuild has been so successful, its national cattle herd is forecast to reach its highest level since 2014, inflating to 28.8M head by June 30. Only three years ago, herd numbers were down as low as 24.6M head. Ultimately this leads to increased beef production and therefore higher availability of Australian beef in global markets. Meat and Livestock Australia (MLA) is projecting that 2023 Australian beef exports will push over 1M MT. This follows two low years through the herd rebuilding phase, when exports struggled to reach 900K MT. It’s no coincidence that through that period of low Australian beef exports, NZ beef performed favorably, relishing the lower competition within global markets.
South Korea: Serious Decline in South Korean Beef Prices (Jan 31)
The price of Korean beef is plummeting day by day. On the 19th of last month, the day before the holiday, the national average wholesale price of Korean beef plummeted to 10.52/kg (13,490 won). This is the lowest price in the last 5 years. After the holiday, Korean beef prices are showing a slight recovery, but it is generally observed that it is not enough to reverse the decline in Korean beef prices. As the price of Korean beef plummeted, a Korean beef farmhouse in Yecheon, North Gyeongsang Province, which was under financial pressure, recently made an extreme choice, and the wave is spreading. The industry is concerned that this crash could lead to a second wave of Korean beef. The Korean beef crisis that gripped farms in 2011 was caused by a decrease in Korean beef consumption due to foot-and-mouth disease issues amid an increase in the number of slaughtered animals and a rapid increase in imports. Decreased consumption led to a drop in prices, which in the aftermath led to farmers giving up breeding. In fact, the issue of supply and demand of Korean beef was raised in 2018, and the cow reduction project was promoted from 2019.
Gangwon-do announced on the 31st that it would invest USD 44M (56.1B won) in the livestock sector in 2023. The provincial government plans to promote 46 policies this year to stabilize farm management in response to the increase in feed costs and the decrease in livestock product prices. The province plans to invest USD 4.9M (6.3B won) in regulating the supply and demand of Korean beef, upgrading its quality, and establishing a livestock improvement system to respond to the decline in the price of production. In addition, it decided to invest USD 11M (13.7B won) in steadily expanding the foundation for self-sufficiency of roughage.
The Council of the Eurasian Economic Commission (EEC) decided to provide tariff incentives for beef imported into the EAEU for the production of meat products in 2023. This is stated in the message of the EEC trade bloc. "The benefits relate to deliveries in volumes of up to 10K MT to the Republic of Armenia, up to 7.5K MT to the Republic of Belarus, up to 5K MT to the Republic of Kazakhstan, up to 2.5K MT to Kyrgyzstan, as well as up to 100 K MT to the Russian Federation," the report says.
Frozen Beef
Argentina: Exported USD 3.454B of Meat in 2022 (Jan 30)
The Consortium of Argentine Meat Exporters (ABC) reported that exports for the month of December 2022 reached a volume close to 47.4K MT by weight of refrigerated and frozen beef, for a value of the order of USD 186.1M. Compared to the month of November 2022, the volumes shipped show a decline of -17.0%, while the value obtained shows a drop of -22.2%. In relation to the month of December 2021, the volumes exported are 2.5% higher, while the value obtained has been 27.8% lower. The accumulated data for the year 2022 reveals that foreign sales of refrigerated and frozen beef were close to 632K MT of product weight, for a value of approximately USD 3.454B. In relation to the year 2021, the volumes exported are 10.9% higher, while the value obtained has been 24.0% higher. The average export price of refrigerated and frozen beef was USD 3,926/MT in December 2022. This value is 6.3% lower than that obtained in last November and 29.6% lower than the average price of December 2021, which had been USD 5,579/MT.
