The US is the largest beef producer in the world. In the third part of a four-part series examining the US beef industry and markets, Farmers Guardian’s sister company Urner Barry looks at the trends impacting US production.
AS the world’s largest beef producer, second-largest importer, and fourth-largest exporter by volume in 2019, the US produced over 12 billlion kg (27bn lb) of beef. And, despite lower slaughter levels in 2020 than in 2019, heavier carcass weights due to backlogged supplies are resulting in higher year-on-year beef production.
Monthly Livestock Slaughter data from USDA showed commercial beef production in July at 1.10bn kg (2.42bn lbs), up 2.6 per cent on last year. Total cattle slaughter under federal inspection in July was 2.87 million head, which was 37,200 head less than a year ago.
The average liveweight was up 17kg (37lb) from the previous year at 618kg (1,363lb). January through July 2020 commercial red meat production was 31.6bn lb, up 1 per cent from 2019.
Per capita beef consumption in the United States has steadily declined from its peak of 42.7kg (94.1lb) in the mid-1970s to 24.4kg (53.8lb) in 2015. In the current cycle, production growth has been fueled by relatively low and stable feed prices, improved genetics and breeding and a sustained economic expansion coming out of the Great Recession.
Since 2015, larger supply has helped beef consumption increase through 2019 to 26.4kg (58.1lb). Projections for 2020 have been lowered given the sharp cutback in supply during the second quarter of the year.
Global demand for US beef continues to drive growth. As economies around the world start to mature and wealth increases, they tend to move up the protein chain. With production increasing, these markets are important to alleviate excess supply.
US beef exports increased from 1,067,279 tonnes in 2010 to 1,319,319t in 2019, a growth of 23.6 per cent. Maybe even more important, the value of US beef exports has nearly increased 100 per cent during that time to $8.089bn (£6.17bn) in 2019.
The latest data shows the number of cattle in the nation’s feedyards to be 11.438m head, down 0.4 per cent from a year ago and slightly below the record high July 1 on feed number set in 2019.
The US cattle industry can process about 125,000 head a day, including cows and bulls which make up roughly 20 per cent of total cattle slaughter.
One of the most critical effects of the pandemic on the cattle industry was worker absenteeism and severely reduced processing capacity. At the peak of beef plant disruptions in late April into early May, daily harvest levels dropped to as low as 75,000 head, about 40 per cent below estimated capacity.
For the week ended May 2, weekly slaughter was reported at 439,000 head, the lowest non-holiday kill on record. A severe buildup of front-end cattle supplies developed because of these plant disruptions.
In the year to date, cattle harvest was 1,058,000 below year-ago levels, but the increase in average carcase weights is still resulting in higher year-over-year beef production.
The industry was making significant headway towards cleaning up the surplus. Daily cattle slaughter levels have recovered to about 95 per cent to 97 per cent of pre-Covid-19 levels. Front-end fed cattle supplies could trend below year-ago levels by the end of the third quarter if orderly marketings were maintained.
Urner Barry is a US based agency covering market prices of red meat, poultry, eggs and seafood. The Farmers Guardian sister company is launching a new report on the UK beef market this month. More more on this visit ubcomtell.com