November 11, 2011

US beef production forecast revised down

The outlook of US beef output is expected to hit 11.98 million tonnes in 2011 and 11.38 million tonnes in 2012, approximately 0.1% and 0.3% less than previous forecasts respectively, according to the most recent USDA's Agricultural Supply and Demand Estimates.

A slowdown in US cattle slaughter late in 2011 and the reduced weight gain of cattle are stated as the key reasons for the downward revision.

For the beef trade, US import estimates for 2011 were raised slightly, to 921,166 tonnes cwt and 948,860 tonnes cwt for 2012. On the other hand, despite production expected to contract, US beef exports are estimated to reach 1.26 million tonnes cwt in both 2011 and 2012. The growth in exports is expected to occur mainly in Asian markets, supported by strong demand and the weak US currency.

The revised US production, import and export estimates are expected to have an upwards influence on prices, which are forecast to increase in 2012, driven by strong demand for cattle against the backdrop of historically tight supplies.