April 8, 2010

World beef supply and demand to contract

World beef and veal consumption is likely to fall by more than 429,000 tonnes in 2010, but with production set to also plunge by 709,000 tonnes (carcass weight equivalent), lower supply will more than offset the reduced demand, according to food industry consultant GIRA.

Following the global recession, demand for beef will remain under pressure in many parts of the world this year, with US consumption forecast to fall by 1.2% and EU consumption down by 1%. China will see a larger drop of 5.5%, with Argentina down by 7%, according to the report.

Similar trend was seen last year, when both supply and demand contracted. It is predicted that the global herd could decline by a further five million head (0.5%) in 2010.

A large proportion of this will be in Argentina, which cut its herd by two million head last year and is forecast to reduce it by a further two million head this year, resulting in a 9% decline in production.

Although Brazil is set to increase its herd this year, exports to Europe will remain subdued due to strong domestic demand and exchange rates.