June 26, 2009

Beef exports from the US may not reach its seven-percent growth forecast this year due to the global recession.

 

It will be difficult to achieve that growth with the recession in place, said Mark Jagels, executive committee member of the US Meat Export Federation (USMEF).

 

Slower-than-expected exports may curb cattle prices in Chicago and erode earnings of meat producers as the recession slashes export and domestic demand.

 

The World Bank said this week the global economy will decline 2.9 percent this year, up from the previous forecast of a 1.7-percent decline.

 

US feedlot managers have also lowered purchases of young cattle by 12 percent last month.

 

All markets including the US have experienced a drop in demand for beef, especially the prime cuts, said Wendy Voss, a senior analyst at Rabobank.

 

There are currently no signs of recovery in US beef consumption and it will take more months, said Terri Carstensen at the Iowa Beef Industry Council.

 

US Wheat Associates Inc. President Alan Tracy recently said that world wheat consumption may rise as some consumers shift from meat to cereals amid the economic slowdown.

 

Japan imported 14,484 tonnes of US beef in the first four months of 2009, up 29 percent on-year, and representing 9.6 percent of total Japanese beef imports that amounted to 150,709 tonnes.

 

Jagels said US beef sales to Japan would increase if Tokyo eases a rule that restricts imports to meat from cattle aged 20-months or younger.

 

An agreement on easing the limit would be delayed because of some issues with the new US administration and maybe an election in Japan in August, said Jagels.

 

US beef shipments to South Korea had fallen short of expectations after the Asian country lifted its import ban, said Voss.

 

"They thought they'd grab back market share quickly and that isn't happening," she said.