Dr. Derrell Peel, Oklahoma State University Extension Livestock Marketing Specialist, offers his economic analysis of the beef cattle industry. This analysis is a part of the weekly series known as the "Cow Calf Corner" published electronically by Dr. Peel and Dr. Glenn Selk. Today, Dr. Peel examines the challenges and opportunities resulting from the evolving dynamics among the US and its competitors in the world beef market.
"It’s a unique time in global beef markets with a wide range of issues providing challenges and opportunities among many of the major beef exporting countries. USDA-FAS (Foreign Agricultural Service) estimates published in April project the top five beef exporting countries in 2017, in order, as India, Brazil, Australia, the U.S. and New Zealand. These five countries were projected to export a total of 6.83 million metric tons of beef, about 71 percent of the total among major world beef exporters.
Recent and ongoing developments may modify these forecasts.
"India is currently projected to be the top beef exporting country with a 2017 forecast total of 1.85 million metric tons of mostly carabeef (water buffalo) exports. Beef exports from India have grown sharply in the past eight years. However, the beef industry in India is mostly operated by Muslim companies which are increasingly in conflict with the Hindu dominated federal government and also in some Indian states. A recent federal ban on trade of cattle for slaughter has raised concerns about India’s ability to maintain supplies of beef for export in 2017.
"Brazil, the number two beef exporting country, is projected to export 1.80 million metric tons in 2017. However, Brazil has been rocked recently by several scandals including a food safety bribery scandal involving several meat companies and a financial and political bribery scandal involving JBS, the world’s largest meat company. It is not clear how much impact these scandals might have on total beef exports from Brazil in in 2017 but any impact will likely be negative.
"Australia has dropped to third place among beef exporting countries with a projected 2017 export total of 1.4 million metric tons. Australia is beginning recovery from a serious drought that forced cattle herd liquidation and temporarily swelled beef production and exports in 2014 and 2015. The resulting diminished herd inventories resulted in reduced beef production and exports in 2016 and continues to restrict beef volumes in 2017. Herd rebuilding is beginning in 2017 but will take some time. Australia is seeing reduced beef exports to all its major markets including Japan, the U.S., South Korea and China.
"The U.S. is the fourth largest beef exporting country with a 2017 forecast total of 1.236 million metric tons. Growing beef production beginning in 2016 along with lower beef prices helped the U.S. to see expanded beef exports in 2016 with additional export growth projected in 2017. The U.S. is in a unique temporary position to increase global market share in major export markets given the disruptions and uncertainty among other major beef exporters.
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