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Slowing beef imports lead to smaller U.S. supplies, drive up prices

Monday, September 20, 2021

Reduced supplies and rising demand for ground beef in the United States could potentially be reflected in the cost of fall tailgating parties across the Nation. While the United States is a major global supplier of beef, it also imports beef and processing-grade beef (used for ground beef) to meet a growing consumer demand. Historically, Australia is the predominant supplier of processing-grade beef to the United States, with smaller amounts coming from Brazil, Canada, and New Zealand, among other countries. As Australia rebuilds its cattle herd after a two-year drought, suppliers in that country are curtailing slaughter, limiting the amount of exportable beef and increasing the prices of those exports. In February 2021, imports from Australia reached a price of $240 per hundredweight (cwt) for 90-percent lean beef, and the volume dropped to under 17 million pounds, almost 27 million pounds lower than the 5-year average. In July 2021, that price rose to $274 per cwt. From January to July 2020, beef imports from Australia accounted for 20 percent of all U.S. beef imports whereas in 2021 Australia accounted for 12 percent. Intermittent monthly imports from other countries have partly offset reduced imports from this key partner. Meanwhile, as the economy reopens, the demand for beef and ground beef is expected to support beef prices. This chart is drawn from the USDA, Economic Research Service’s September 2021 Livestock, Dairy, and Poultry Outlook.

Robust overseas demand for U.S. meats, led by pork and poultry, drove trade surplus in 2020

Monday, May 24, 2021

The United States is the world’s largest producer of poultry and beef and the third-largest pork producer. Abundant exportable supplies have enabled trade of major U.S. meats and products to run a continual surplus overall, with high demands for U.S. animal proteins in Asia and favorable trade agreements driving quantities exported above quantities imported for pork, broiler meat, and turkey. By volume, broiler meat (broilers are a subset of chickens) was the most traded U.S. meat in 2020. Exports of broiler meat accounted for 92 percent of total poultry (total chicken plus turkey) exports and exceeded imports by almost fiftyfold. Pork exports further contributed toward the growth in the meat trade surplus. In 2020, pork exports were sevenfold higher than pork imports, increasing more than 15 percent, or almost 1 billion pounds from a year earlier. In contrast, apart from 2018, the amount of beef imported by the United States has exceeded exports 7 of the last 8 years. Last year, U.S. beef exports declined more than 2 percent from a year ago, while beef imports rose more than 9 percent over the same period. This trade deficit reflects, in part, a robust U.S. demand for processing-grade beef. Turkey imports were up 72 percent and turkey exports were down 11 percent in 2020, with export levels resulting in a trade surplus for turkey. This chart is drawn from the USDA, Economic Research Service’s April 2021 Livestock, Dairy, and Poultry Outlook.

U.S. beef trade shaped by production events

Monday, April 19, 2021

Since 2000, U.S. imports of beef have represented about 11 percent of U.S. production and exports about 9 percent. U.S. beef trade is largely dependent on domestic production, and shocks to production can lead to a boost in import demand and a reduction in supplies available for export. The 2003 discovery of bovine spongiform encephalopathy (BSE) in Canada and then in the United States disrupted beef trade in North America. As a result, U.S. imports of beef rose to record levels in 2004 and 2005. U.S. beef exports, however, plummeted as trading partners banned U.S. beef. Consequently, as trade barriers were resolved, U.S. beef exports steadily grew. In the late 2000s, drought conditions caused reductions in the U.S. cattle herd. The herd shrank to its smallest size since 1952, lowering beef production in 2014–15 to levels not seen in 20 years. In the second quarter of 2020, weekly beef production fell as much as 34 percent, compared with the same period in 2019, at facilities where operations temporarily closed or shifts were reduced as COVID-19 spread through their labor forces. In 2021, U.S. beef exports are expected to grow as a percent of production, while imports are expected to fall. This chart is based on data released in the USDA, Economic Research Service’s Livestock, Dairy, and Poultry Outlook, April 2021.

Global suppliers competed on price in 2020 for China's beef market

Monday, March 1, 2021

Despite shipping record-breaking volumes of U.S. beef to China from July to December 2020, the United States supplied only 1.3 percent of China’s total imports of beef. Beef-exporting competitors of the United States—Canada, Brazil, Argentina, Australia, Uruguay, and New Zealand—account for the vast majority (93 percent) of the total volume of China’s total beef imports worth $9.518 billion. This may be in part because the U.S. value per pound of beef shipped to China is higher than most of its competitors in the China beef market, with the exception of Canada. Both the United States and Canada primarily export a grain-fed product distinct from what China typically imports from other countries. In 2020, the U.S. unit value per pound of frozen boneless beef—the product the United States has been exporting to China in recent years—averaged $3.42. Canada’s unit value for beef imported in China exceeded that of the United States at $4.01 per pound, while other competitors’ unit values ranged from $2.08 to $2.85. Despite a higher unit price of U.S. beef, China’s commitment to purchase an additional $200 billion of American-made goods and services over 2020 and 2021 under the United States–China Phase One trade deal could lead to continued growth of U.S. beef exports. This chart is drawn from the USDA, Economic Research Service’s January 2021 Livestock, Dairy, and Poultry Outlook.

COVID-19-related labor force absences in beef packing facilities significantly impact record pace of beef production

Thursday, April 30, 2020

Beef production in the first quarter of 2020 set a first-quarter record. Even as retail demand for beef increased in late March as consumers prepared to shelter in place, the USDA National Agricultural Statistics Service reported that beef held in cold storage at the end of March 2020 was 11 percent above last year and 2 percent above the previous month. Since its peak in late March, federally inspected beef production fell almost 32 percent through the week ending April 25 as the rate of cattle slaughter declined at several beef packing facilities. The slowdown in cattle slaughter limited beef production at these facilities where operations temporarily closed or shifts were reduced due to labor force absences caused by the spread of COVID-19. At a time when cattle slaughter numbers increase seasonally, cattle slaughter rates for the week ending April 25 were down 28 percent year-over-year. As the impacts of COVID-19 continue to evolve quickly, the Economic Research Service continues to closely monitor the latest USDA data and industry news. Some of this information is discussed in the Economic Research Service’s Livestock, Dairy, and Poultry Monthly Outlook report from April 2020 and is updated using data from USDA’s Agricultural Marketing Service and National Agricultural Statistics Service.

Record increase in March farm-to-wholesale beef price spread driven by sharp wholesale price changes in mid-March 2020

Thursday, April 23, 2020

A sharp increase in the wholesale value of beef, along with a modest decline in the value of steers between February and March 2020, produced a larger monthly increase in the farm-to-wholesale price spread for Choice beef than ever before. The farm-to-wholesale price spread calculates how much the farmer receives versus how much the wholesaler receives on a per-pound basis. The price spread increase of 42 cents per pound of retail product in March 2020 was the largest since August 2019 when the spread rose over 36 cents per pound in one month, reaching the all-time high. At that time, a beef plant in Holcomb, Kansas which comprised about 6 percent of U.S. beef packing capacity, had caught fire and shut down, instantly tightening wholesale supplies. The March run-up in wholesale beef prices may be attributed, in part, to an increase in grocery store demand for beef, as consumers prepared to shelter in place due to COVID-19 and supply chains adjusted to stronger retail demand and weaker food service demand. This chart is drawn from the Economic Research Service’s Meat Price Spreads data product.

ICYMI... Since 1970, increasing cattle weights have fueled growth of U.S. beef production as cattle used have decreased

Thursday, December 5, 2019

Over the last 50 years, U.S. beef production (measured as volume of meat produced) steadily increased by 25 percent, even while the number of cattle destined for beef production decreased by 6 percent. When beef production, numbers of cattle, and average cattle weights are viewed as indices (with a base year of 1970), the trend becomes clear. Since 1970, beef production has increased by roughly 25 percent. Over the same period, however, the number of cattle used in beef production has fallen by 6 percent. The decline in the number of cattle has been countered by a more than 30-percent increase in average cattle weights, driven mainly by increases in the average weights of steers and heifers, which represent 80 percent of cattle destined for beef production. Changes in breeding practices have produced heifers and steers with higher growth rates and higher feed conversion efficiencies in pastures and feedlots. USDA forecasts beef production to reach record levels in 2019 and again in 2020. Both years are expected to surpass the previous record set in 2002, but with 8 percent fewer cattle than in 2002. This chart appears in the ERS Livestock, Dairy, and Poultry Outlook newsletter, released in May 2019. This Chart of Note was originally published June 5, 2019.

Since 1970, increasing cattle weights have fueled growth of U.S. beef production as cattle used have decreased

Wednesday, June 5, 2019

Over the last 50 years, U.S. beef production (measured as volume of meat produced) steadily increased by 25 percent, even while the number of cattle destined for beef production decreased by 6 percent. When beef production, numbers of cattle, and average cattle weights are viewed as indices (with a base year of 1970), the trend becomes clear. Since 1970, beef production has increased by roughly 25 percent. Over the same period, however, the number of cattle used in beef production has fallen by 6 percent. The decline in the number of cattle has been countered by a more than 30-percent increase in average cattle weights, driven mainly by increases in the average weights of steers and heifers, which represent 80 percent of cattle destined for beef production. Changes in breeding practices have produced heifers and steers with higher growth rates and higher feed conversion efficiencies in pastures and feedlots. USDA forecasts beef production to reach record levels in 2019 and again in 2020. Both years are expected to surpass the previous record set in 2002, but with 8 percent fewer cattle than in 2002. This chart appears in the ERS Livestock, Dairy, and Poultry Outlook newsletter, released in May 2019.

Home-grilled cheeseburger costs are beefier today than they were 20 years ago

Monday, July 2, 2018

If cheeseburgers are on your menu for July 4, they will cost you 20 percent more than their inflation-adjusted cost from 20 years ago. And that greater cost is due to higher ground beef prices. In 2018, the ingredients for a home-prepared, quarter-pound cheeseburger total $1.69, with ground beef making up the largest cost at $0.92. This same cheeseburger would have cost $0.91 to prepare in 1998, the equivalent of $1.40 in 2018 dollars, with ground beef accounting for $0.55 in 2018 dollars. Today’s higher ground beef prices in grocery stores likely reflect cattle supply disruptions in the early 2000s and early 2010s, resulting in higher-than-average increases in retail ground beef prices during those years. Although U.S. beef production has since increased, prices are slower to retreat at the retail level. In contrast, efficiencies throughout the food supply chain helped lower prices for the other cheeseburger ingredients. Inflation-adjusted retail bread prices between 1998 and 2018 fell by 2.8 percent, tomato prices by 12.3 percent, lettuce prices by 27.9 percent, and cheddar cheese prices by 5.7 percent. More information on ERS’s food price forecasts can be found in ERS’s Food Price Outlook data product, updated June 25, 2018.

U.S. beef exports to China resume after 14-year absence

Wednesday, January 3, 2018

In June 2017, the United States began shipping beef to China after a 14-year absence. U.S. beef was banned from China following the discovery of isolated cases of Bovine Spongiform Encephalopathy (BSE)–commonly known as mad cow disease–in the United States and Canada in 2003. Prior to 2003, China was among the top 10 U.S. beef export markets, but still significantly smaller than leading U.S. partners like Japan, Canada, and Mexico. In recent years, China has expanded its global beef imports and ranked as the second largest global beef importer behind the United States in 2016. U.S. beef shipments to China have grown since June and reached almost 2 million pounds in September alone. While 2 million pounds is less than 1 percent of September’s total U.S. beef exports, shipments to China are expected to grow as more U.S. suppliers receive proper USDA verifications to supply this market. This chart is drawn from the ERS Livestock and Meat International Trade Data product updated in December 2017.

U.S. beef exports higher in every month of 2017 compared with a year earlier

Thursday, November 30, 2017

In every month in 2017, U.S. beef exports exceeded the prior year’s exports, according to the latest trade data through September. Year-to-date beef exports through September total just under 2.1 billion pounds, compared with 1.8 billion during the same time in 2016, a 15-percent increase. Much of the growth in U.S. beef exports can be attributed to increased shipments to Japan, which has received 29 percent more beef so far in 2017, compared with 2016. This rise has amounted to more than 140 million pounds of beef. The growth in U.S. beef exports has coincided with stronger domestic beef production and lower prices relative to recent years. An additional factor that influences U.S. trade, is the relative strength of the country’s dollar compared with its competitors. Between January and September 2017, the U.S. dollar depreciated by roughly 8 percent, according to the St. Louis Federal Reserve’s Trade-Weighted U.S. Dollar Index. A depreciating dollar relative to a trading partner makes U.S. goods more attractive because more dollars can be purchased with the same amount of the partner’s currency. This chart appears in the Livestock, Dairy, and Poultry Outlook Newsletter, released in November 2017.

U.S. cattle dressed weights are down slightly in 2017, but remain above long term averages

Wednesday, October 25, 2017

Seasonality of steer dressed weights are largely determined by biological factors and weather-related impacts on animal growth. Seasonally, steer weights tend to increase from the spring months, then decline from late fall into the early spring months. The long-term trend, which has been marked by sustained growth in dressed weights, is due to improvements in cattle genetics through selective breeding and the implementation of modern production systems. For steers, several factors interact to influence year-over-year changes in carcass weights including: producers’ responses to market prices of outputs and inputs (feed and feeder animals); weights and age at which animals are placed into feedlots; and animals’ biological responses to abnormal weather. Steer weights in 2017 are lower than a year ago, driven by aggressive marketing of slaughter-ready animals in feedlots, especially compared to a year ago. This is due to greater profit margins for retail meat packers than in 2016. Still, steer weights remain above their 10-year average, a period in which 2011-13 corn price averaged more than 6 dollars per bushel. This chart appears in the Livestock, Dairy, and Poultry Outlook newsletter released in October 2017.

Deforestation due to agriculture in Brazil has generally declined over time

Monday, May 15, 2017

Increasing global population and demand for food have led to rising agricultural production and demand for land for farming purposes. Expanded agricultural land has often come from tropical deforestation in developing countries that have become major exporters of commodities like beef, soybeans, and palm oil. In Brazil, for example, deforestation is linked most closely with the production of beef in the Amazon basin and the Cerrado region. Historically, cattle account for over 80 percent of deforestation in the Amazon and 88 percent in the Cerrado. At its peak in 1995, beef accounted for 3.75 million hectares of deforestation in Brazil, compared to 0.71 million hectares in 2013. Deforestation due to soybean production has generally remained low, particularly in the Amazon. Soybean production has mostly increased by expanding onto previously cleared cropland or pasture, rather than by contributing directly to deforestation. In more recent years, higher yields and policy changes have contributed to a decline in deforestation rates in Brazil. This chart appears in the ERS report International Trade and Deforestation: Potential Policy Effects via a Global Economic Model, released April 2017.

Lower ground beef prices reduce cost of home-grilled cheeseburgers by just over 6 percent from a year ago

Thursday, June 30, 2016

If cheeseburgers are on the menu for your July 4 barbecue, they will cost you less this year than last year. Thanks to lower prices for ground beef, bread, and tomatoes, the cost of a home-prepared cheeseburger was 6.3 percent lower in May 2016 compared with May 2015. In May 2016 (latest available prices), the ingredients for a quarter-pound cheeseburger totaled $1.72 per burger, with ground beef making up the largest cost at $0.93 and cheddar cheese accounting for $0.34. This same cheeseburger would have cost $1.83 to prepare in May 2015. Ground beef prices decreased 10.1 percent between May 2015 and May 2016, translating to a $0.10 per quarter-pound savings. Bread and tomato prices also decreased, bread prices fell 5.5 percent and tomato prices 2.6 percent. Cheddar cheese prices increased 1 percent from last May. Lettuce prices, on the other hand, were up 3.2 percent, but due the small piece of lettuce topping the cheeseburger, this translated into an increase of less than a cent per burger. More information on ERS’s food price forecasts can be found in ERS’s Food Price Outlook data product, updated June 24, 2016.

India emerges as major beef exporter

Monday, June 27, 2016

Since the late 2000s, India’s exports of beef—specifically water buffalo meat, also known as carabeef—have expanded rapidly, with India moving just ahead of Brazil to become the world’s largest exporter in 2014. India’s beef exports during the period have grown at an annual rate of about 12 percent, rising from an average volume of 0.31 million metric tons during 1999-2001 to an estimated 1.95 million during 2013-15. India’s robust export growth contributed to the expansion of world beef trade during this period and also increased the country’s share of the volume of shipments by major world beef exporters from just 5 percent during 1999-2001 to about 20 percent during 2013-15. The U.S. market share fluctuated during this period but declined from an average of 18 percent during 1999-2001 to 12 percent during 2013-15. This chart is from the ERS report, From Where the Buffalo Roam: India’s Beef Exports, released June 22, 2016.

Farmer share of retail value of red meat is declining

Thursday, March 10, 2016

The spreads between farm prices for hogs and cattle and retail prices for pork and beef have widened over the past 18 months, leading to a decline in the farmer share of retail red meat prices. Growing cattle inventories and increased pork production are pushing cattle and hog prices lower. For the fourth quarter of 2015, hog prices (51-52% lean) averaged about $45 per hundredweight, down about 33 percent from a year earlier and nearly 50 percent below the prices received in the second quarter of 2014. Similarly, cattle prices (5-market steer price) averaged $128 per hundredweight in the last quarter of 2015, down nearly 23 percent from the fourth quarter 2014. Retail prices for both beef and pork are down as well, but by a smaller magnitude as they tend to adjust more slowly to changes in the farm price due to the wide variety of other costs—including labor, packaging, storage, and transportation—that also contribute to retail prices. This chart is based on the ERS Meat Price Spreads data product.

Chicken's popularity makes it the most consumed U.S. meat

Monday, January 25, 2016

In 2013, 57.7 pounds of chicken per person on a boneless, edible basis were available for Americans to eat, compared to 53.6 pounds of beef and 43.4 pounds of pork, according to ERS’s food availability data. From 1909 to the early 1940s, chicken availability had been around 10 pounds per person a year, while yearly per-person beef and pork availability had ranged from between 30 and 50 pounds. Chicken began its upward climb in the 1940s, as innovations in breeding, mass production, and processing made chicken more plentiful, affordable, and convenient for the dining-out market and for cooking at home. By 1996, chicken had overtaken pork as the second-most-consumed meat, and in 2010, chicken overtook beef for the No. 1 spot. Beef availability rose during the second half of the last century, peaking at 88.8 pounds per capita in 1976. Pork availability, which had fallen in 2010 and 2011, was up in 2012 and again in 2013. This chart appears in ERS’s Ag and Food Statistics: Charting the Essentials data product.

Wholesale beef prices turn sharply lower

Tuesday, October 27, 2015

Beef prices typically experience a seasonal decline at the end of summer, but the decline in prices since August this year has been particularly steep, and the combination of abundant supplies and lower demand suggests cattle and beef prices could continue to decline. Cattle are remaining on feed longer and are currently being marketed at record-high weights, resulting in increased beef production this year despite the historically small cattle supplies. At the same time, beef demand is in the midst of its seasonal decline as attention shifts from grilling to roasting items. As a result, wholesale beef prices have declined steadily since late August, while the price premium that Choice beef typically receives over the Select grade is diminishing, reflecting current strong supplies of these higher graded cuts relative to previous periods. Adding to the market pressures, beef exports are down from this time last year due to a strengthening U.S. dollar and softening demand for U.S. beef, resulting in larger-than-anticipated volumes to be consumed in the domestic market and the expectation for continued downward pressure on prices in the near term. This chart is from the October Livestock, Dairy, and Poultry report.

U.S. poultry and eggs output has grown more rapidly than dairy and meat animals

Friday, October 23, 2015

Total U.S. livestock output grew 130 percent from 1948 to 2011, with the poultry and eggs subcategory growing much faster than meat animals (including cattle, hogs, and lamb) and dairy products. In 2011, the real value of total poultry and egg production was more than seven times its level in 1948, with an average annual growth rate exceeding 3 percent. The rapid growth of poultry production is due largely to changes in technology—advances in genetics, feed formulations, housing, and practices—and increased consumer demand. Retail prices of poultry fell in the late 1970’s and 1980’s, relative to beef and pork prices, leading to expanded poultry consumption in that period. Increased domestic consumption and exports were also driven by consumer response to an expanding range of new poultry products, as the industry moved away from a reliance on whole birds and production shifted to cut-up parts and processed products such as boneless chicken, breaded nuggets/tenders, and chicken sausages. This chart is found in the ERS report, Agricultural Productivity Growth in the United States: Measurement, Trends, and Drivers, July 2015.

India projected to remain the leading global beef exporter

Friday, October 9, 2015

Since 2009, India’s exports of beef—specifically water buffalo meat, also known as carabeef—have expanded, with India moving ahead of Brazil to become the world’s largest beef exporter in 2014. India’s beef exports grew about 14 percent annually between 2000 and 2015, and are expected to lead major exporters with about 6 percent annual growth during 2015-2025. India’s exports of relatively low-cost beef (primarily to low- and middle-income markets in Southeast Asia and the Middle East) reached a 24 percent global market share in 2015, and that share is projected to increase to 32 percent by 2025. The U.S. share of the global beef market has fluctuated, but averaged 12 percent during 2013-2015, and is projected to rise to 15 percent in 2025. This chart is based on data and analysis from USDA Agricultural Projections to 2024.

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