July 18, 2009

US beef imports seen up 13 percent on-year

The US is expected to import 2.86 billion pounds of beef in 2009, up nearly 13 percent from last year.

The US imported 238 million pounds of beef in May, up three percent from May 2008, according to latest official statistics.

While the US dollar has weakened since its peak in March, it remains considerably stronger than the Canadian, Australian and New Zealand dollars, the country's three largest beef suppliers.

Higher US beef imports continue to be driven by increased Australian beef.

Despite the adverse effects of dry conditions, Australian cow herds are expected to continue to increase in 2009-10, said the Australian Bureau of Agriculture and Resource Economics (ABARE). The agency expects Australian beef exports to decline next year due to expectations of a weaker economy in South Korea and larger market share of US beef in both Japan and South Korea.

Japan, the US and South Korea are the three largest beef export markets for Australia. Without alternative markets and with increased production partly due to a shrinking dairy industry, more Australian beef could be shipped to the US in the second half of 2009 and into 2010.

Meanwhile, rising unemployment and lower wages could also negatively impact prices, lowering beef demand and result in lower beef imports in outlying months.