7 December 2011

2 minute read

The only one of the main beef producers to be hit in volumes so far has been Brazil. However, even Brazil has seen the value of the beef it has been selling rise wile the volumes have been falling.

This week, Shane Ellis from Iowa State University said that the growth of US beef export volumes and the anticipation of substantial demand growth in coming years with new customers and growing appetites for beef is creating an exciting prospect for the beef industry.

In the first three quarters of this year US beef exports amounted to more than 2.1 billion pounds and were 27 per cent larger than export volumes during the same period a year ago.

Over 10 per cent of the beef produced in the US is now exported and the US is now a net exporter of beef. Year-to-date exports to Japan, South Korea and Canada so far this year have grown by 100 million pounds each.

The prospects for the EU beef market are also very positive, with the EU Commission forecasting beef prices to continue rising in 2012, driven by lower production and tighter supplies, increasing exports and lower imports.

The Commission is forecasting beef production for the EU to decline by 2.8 per cent to 7,122 million tonnes in 2012 and prices to increase by a further 1.7 per cent, on top of a 9.5 per cent price increase in 2011.

There has been a dramatic change in fortunes for the EU beef industry as in 2007 the region was a net importer of beef, shipping in 308,000 tonnes. Now the EU has become a net exporter shipping 237,000 tonnes.

The picture is similar in Australia where exports to South East Asia and China have risen by seven per cent between January and November this year and to South Korea, where Australia has nearly 50 per cent of the market, exports are up by 22 per cent.

The global change has been driven by a surge in world beef prices on the back of a drop in global production.

The outbreak of foot and mouth disease in South Korea has also helped raise exports in this region.

For Brazil this global rise in beef prices has come as a relief to its industry as it has managed to keep the value of the country's beef exports high - ahead of 2010 this year, while volumes have fallen.

Exports to traditional markets such as Russia, Iran and Egypt have seen drops in volumes of 26 per cent, 39 per cent and 35 per cent respectively, while values have risen by 24 per cent, 26 per cent and 18 per cent respectively.

Chris Harris