US beef exports seen competitive in global market

First-quarter exports of US beef increased 25% from 2009; this growth largely stems from the increasing US sales in several Asian markets, namely in Japan, South Korea, Taiwan, and Hong Kong, according to reports.

The report showed that first-quarter 2010 exports to Japan and South Korea improved 30% and 9%, respectively, above a year-ago levels. The strength of the Australian and New Zealand dollars, coupled with strong US beef marketing campaigns in Japan and South Korea, has shifted some of the market share away from Australia and New Zealand, the US' primary competitors for these markets.

The result is respective US market share increases of 54% and 31% in Japan and South Korea, compared with the same quarter last year. Beef exports to Hong Kong increased 143%.

First-quarter beef exports to the US' second largest export market, Canada, increased nearly 20% from year-earlier levels. The US dollar continued its decline against the Canadian dollar throughout the first-quarter, fuelling exports to Canada. US beef exports to all countries for 2010 are forecast at 2.1 billion pounds, an increase of more than 10% from 2009.

Global demand for beef is anticipated to continue strengthening into 2011; however, supply constraints may prove to be much like this year's.

US and global beef supplies will continue to be very tight as herd rebuilding is either in progress in the (US) or herd sizes are just beginning to increase as a result of heifer retention (Australia and New Zealand), the report said.

According to the report, total beef exports for 2011 are forecast at 2 billion pounds, about a 3% decline from the 2010 export forecast. The US can expect an even smaller calf crop and total January 1 cattle and calf inventory next year before producers fully commit to rebuilding herds; this should be in lieu of high cow slaughter rates in proportion to cow inventory, as has taken place this year.

Although global demand should be nearer to full recovery in 2011, reduced domestic supplies will inhibit larger amounts of beef from entering the US export market. Relatively higher prices for US beef may limit its competitiveness against products from Oceania and South America, the report said.