For a third consecutive year, world beef production is expected to decline, with a forecast of 0.7% fall for 2010 as compared to 2009, USDA's Foreign Agricultural Service (FAS) said.

 

Four of the five largest beef producing nations are expected to produce less beef. US beef production is forecast to be down 0.8%.

 

USDA's FAS forecast a 14% increase in exports by Brazil, the world's largest beef exporter. The US (No. 3 in world beef exports) is forecast to increase beef exports by 10% due to the stronger than expected economic recovery in Asia. The US is the largest importer of beef in the world and the country's 2010 imports are forecast lower, despite tighter domestic supplies, as Asian markets will likely bid aggressively for Oceania and Uruguayan product.

 

The US continues to import beef over the years to satisfy domestic market. US beef demand is largely for ground beef and steaks. Steak demand is oriented toward high-quality middle meat cuts, but ground beef can be made from a wide variety of lean meat.

 

Ground beef production requires additional lean meat to mix with the trimmings from steer and heifer slaughter. The US industry utilises the cull cow and bull markets to supply some of this lean meat, but the country does not produce enough cull cow meat and additional lean must be added to the mix. Hence, other low demand meats such as chucks and rounds are occasionally used to grind into hamburger. However, this is a relatively expensive product since it has been finished on grains. A more efficient plan would be to sell the chucks and rounds on the export market, and import the lean meat needed to grind into hamburger.

 

Even at a relatively low value as muscle cut, chucks and rounds have higher value for export than for grinding. Thus, the export of Select Chucks and Rounds to Mexico is important to the US market.

 

It is at the hamburger market level where the beef industry competes most intensively with pork and poultry and even a fraction of a cent per pound change in cost for ground beef affects competitiveness of the industry. Lean beef imports sourced from Australian range beef, New Zealand dairy beef or Canadian cull cows are mixed with steer and heifer trim, thereby providing competitively priced ground beef and a way to utilise trim product that would have almost no value otherwise.