September 16, 2024

US beef exports decline amid lower production, but import demand rises

US cattle slaughter and beef production have continued to decline in 2024 compared to the previous year, leading to reduced exportable beef supplies for the global market, Beef Magazine reported.

Through August, weekly cattle slaughter numbers were approximately 4% lower than the same period in 2023. However, cattle dressed weights have averaged about 3% higher than last year, which has helped offset the lower slaughter rates. As a result, beef production for the year up until August was down by around 1%. This decline has led to reduced beef supplies available for export.

From January through July, US beef exports totalled nearly 1.8 billion pounds, marking a 2.9% decrease compared to the same period in 2023. Among the top five US beef export destinations, South Korea saw a 12% drop, China was down 9%, and Canada saw a 3% decline. However, exports to Japan and Mexico increased by 0.2% and 14%, respectively.

Despite the decline in export volumes, the total value of US beef exports rose by 6% during the same period, reaching nearly US$5.5 billion from January to July. On a value basis, US beef exports increased for South Korea (up 3%), Mexico (up 22%), Japan (up 5%), and Canada (up 11%), though exports to China declined by 5%. While the volume of US beef exports is expected to be lower in 2024 than in 2023, the value of those exports is projected to be higher.

Domestically, lower beef production has led to increased beef imports. During the first seven months of the year, US beef imports surpassed 2.6 billion pounds, a 20% increase from the same period in 2023. Imports from Canada rose by 4%, Australia by 75%, Brazil by 31%, and New Zealand by 12%, while imports from Mexico fell by 17%.

On a value basis, US beef imports from January to July were nearly US$6 billion, a 17% increase compared to 2023. The value of beef imports from Australia grew by 59%, New Zealand by 15%, and Brazil by 26%, though imports from Canada and Mexico fell by 4% and 0.6%, respectively.

The increase in both volume and value of beef imports corresponds with a rise in weekly wholesale prices for boneless beef. In July and August, the price of fresh, 90% lean beef ranged from the mid- to upper US$3.00 per pound, reaching a record high of US$3.76 per pound in early August—an increase of 28% from the same period last year. This surge reflects strong demand for lean beef, which is combined with fat trimmings to produce ground beef sold at retail. By late August, the wholesale price for fresh, 50% lean beef was US$1.39 per pound, above the 88-cent average price seen in the first half of 2024.

The rise in prices for both fresh, 90% lean and 50% lean beef signals continued demand for ground beef products at the retail level. In July, the retail ground beef price hit a record US$5.50 per pound, an 8% increase from the previous year, underscoring strong consumer demand.

Several macroeconomic factors could affect future beef demand and trade. A stronger US dollar could make U.S. beef exports more expensive, reducing competitiveness globally, while a weaker dollar would have the opposite effect. Additionally, rising consumer credit card debt, which reached a record US$1.14 trillion in the second quarter of 2024, may indicate reduced discretionary spending on higher-priced items such as ground beef.