November 30, 2021
US beef production to fall in 2022, Rabobank says
According to Rabobank, the global beef market picture appears to be tightening as demand increases and US beef production is trending toward contraction, Meat+Poultry reported.
In its Q4 Beef Report, Rabobank said that even with US cow slaughter up by 6%, production will decline 2.5% in 2022. The bank said that while drought and grazing conditions have improved, feed and hay supplies remain limited.
US beef exports, however, are expected to stay strong in 2022.
"Markets in Japan, South Korea, Mexico, and Canada remain strong, but the growth in exports to China is driving the increased export volume," said Angus Gidley-Baird senior analyst of Animal Protein at Rabobank. "China has become the third-largest export destination for the US, and export volumes continue to rise."
While the report added that US beef imports could rise with the contraction in production, factors such as the fall in imports of lean manufacturing beef last year, and the continuing concern of atypical bovine spongiform encephalopathy (BSE) from Brazil, might impact imports in the short-term.
With regard to COVID-19, Rabobank said that many foodservice locations are still restricted, particularly with China's tight restrictions and rise of cases in Europe.
Rabobank also forecast that US beef production would not normalise until at least 2023.
"With China's beef imports continuing to grow, import demands from Japan and South Korea remaining firm, and US import requirements increasing, the stage is set for Brazil and other exporters to increase their shipped volumes," Gidley said. "If this does not happen, we will likely find ourselves in a more severe situation come the end of 2022."