October 19, 2004

US Beef Production Decline Offsets Loss of Exports

Through the first three-quarters of this year, per capita beef consumption in the US is down fractionally from a year ago, with the modest reduction due to first-quarter production declines attributed to poor feeding conditions.

However, for the first three quarters, beef production was down about 1.8 billion pounds from a year earlier, while beef exports were down about 1.6 billion pounds. In both instances, declines were driven by changes in fed beef, although the largest year-to-year declines in domestic beef production were in cow beef. Cow beef only comprises about 15 to 20 percent of domestic beef production.

To maintain per capita beef consumption near year-earlier levels, production must increase about 1 percent to offset population increases. This year the consumption offset is being made up by a 600-million-pound increase in beef imports. While some of this increase is fed beef from Canada, which was banned from the US market in late May through mid-August 2003 due to the BSE, most of the increase is lean processing beef to make up for the sharp reduction in cow beef production.

Consequently, per capita beef consumption is down only fractionally even as beef production through September was down about 9 percent. Beef demand remains strong with Choice retail prices through the third quarter, up about 13 percent.

Source:  ERS/USDA