November 3, 2006
Aftereffects of animal diseases to affect world meat trade in 2007
World supply of beef continues to be tight due to the negative impacts of disease restrictions, according to a USDA report titled Livestock and Poultry- World Market and Trade.
The report, released in October predicts that total beef exports by major traders would increase over 6 percent in 2007 as major producers like the US and Brazil recover from disease related trade restrictions.
Even though Canadian and US beef exports have not achieved full recovery of lost markets due to mad cow disease, US beef exports are continuing to recover and are forecast to rise to 680,000 tonnes next year, the report stated.
China, Brazil and the United States are forecast to see the largest gains in beef production. Chinese beef production has grown 5 to 7 percent annually since 2002 and would increase over 5 percent in 2007 due to an expanding herd.
Continued production growth in China is supported by strong domestic demand as disposable income increases and consumers shift from poultry to other meats due to bird flu.
Similarly, beef production growth in Brazil, forecast at 3 percent in 2007, is driven by strong domestic demand and lifting of trade bans.
The Brazilian cattle herd is forecast to expand 4 percent in 2007 thanks to investments in genetics and improved production practices.
Brazilian beef exports are forecast to increase 2 percent in 2007 as several markets have fully or partially lifted bans that were imposed because of FMD.
The report noted Brazil lost significant exports in Russia, its major market, as well as to Chile and the EU during the first half of 2006.
However, expanded sales to Egypt, Saudi Arabia, Israel, Romania and several other smaller markets offset the loss, as did the increase of cooked products to the United States.
Brazil's focus on smaller non-traditional markets would likely continue in the second half of 2006 and through 2007, USDA predicted.
Japanese beef imports are forecast to increase more than 10 percent in 2007 after an expected 1 percent decrease in 2006. High Japanese beef prices have negatively impacted consumption in 2006. The return of US beef to Japan should help stimulate demand, the report said.
Initial exports of US beef to Japan have been slow due to high US beef prices, consumer anxiety, and strict restrictions .
The food service sector, particularly beef bowls and barbeque establishments, not only found Australian grass-fed beef unsuitable, it also had difficulty securing supplies of Australian grain-fed beef.
Thus, restaurants would help the return of US beef. When that happens, it is expected that Australian beef exports to Japan would drop while US beef imports recovers market share, the report said.
As for pork, Brazilian pork production would increase nearly 5 percent in 2007 to just under 2.9 million tonnes driven by increased domestic demand and the recovery of export markets impacted by FMD outbreaks in late 2005.
Russia accounted for two-thirds of the pork Brazil exports. From January to July 2006, Brazilian pork exports to Russia were down 44 percent from the same period in 2005.
However, in the same period, Brazilian pork exports gained ground in non-traditional markets such as Hong Kong, Singapore, and Ukraine.
Brazilian pork exports are expected to decline 29 percent in 2006.
As shipments increase to smaller non-traditional markets, Brazilian pork exports are forecast to rise 6 percent in 2007 to 570,000 tonnes.
US pork exports are forecast to achieve a historic high of just over 1.4 million tonnes in 2007 and account for 14.3 percent of US pork production in 2005.
The report also noted that US pork exports to Russia would grow as Brazil would be unable to sustain its position in the Russian market due to FMD.
The United States, Canada and the EU would likely benefit from the reduced participation of Brazil in the Russian market, the report concluded.
For more of the USDA article, please click here.
