Beef is an important component of a healthy diet, providing protein and essential vitamins and minerals to billions of people. Cattle raising and beef production provides income to farmers and ranchers around the world, along with significant employment and revenue to food manufacturers and ancillary industries.Key facts about the global beef market:
Beef Market Analysis
Key themes affecting the global beef market
Brazil continues to dominate the global cattle and beef sector, with ongoing growth of the cattle herd and sizeable potential for further increases in beef exports. The growth phase of the US cattle herd has come to an end for now, with prospects of plateauing to mild liquidation in the early part of the decade. However, US beef production will reach record levels in 2020. With increasing beef production in the latter part of the last decade and strong beef demand (domestic and export), US beef packers have experienced increased market leverage and record margins over the last two to three years. This followed tight to negative margins through most of the first half of the last decade.
China has become the world’s largest beef importer over the last two years, with an increase of more than 50% in 2019 over 2018 and prospects for further increases exceeding 20% this year. However, the 2020 coronavirus epidemic is currently causing disruptions in protein trade into the region.
Drought conditions have reduced the Australian cattle herd to the lowest level in two decades and rains in 2020 in Australia have led to sharp reductions in cattle harvest as producers attempt to rebuild herd inventories. In turn this will result in near term reductions in beef production and exports and could provide opportunities for other countries to increase export activity into some of the more lucrative markets in Asia and other regions where rising incomes have contributed to increasing global demand for proteins. Countries that are expected to show increases in beef exports in 2020 include Brazil, US, India, New Zealand, Argentina and Brazil.
US Beef Packer Gross Margin (US$/head) | ||||
| Q1 | Q2 | Q3 | Q4 |
2015 | ($33)-$99 | $32-$260 | $102-$250 | $102-$276 |
2016 | $76-$198 | $108-$291 | $206-$315 | $122-$342 |
2017 | $85-$226 | $89-$376 | $257-$36 | $177-$31 |
2018 | $142-$260 | $234-$448 | $290-$432 | $257-$369 |
2019 | $209-$285 | $278-$408 | $354-$644 | $246-$581 |
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