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US beef production growth on the horizon
22 July 2015
The latest round of outlook reports released by the United States Department of Agriculture (USDA) indicate that US beef production will be lower in 2015, but start to increase from 2016. The World Agricultural Supply and Demand Estimates and Livestock, Dairy and Poultry Outlook estimate 2015 beef production to reach 10.8 million tonnes carcase weight (cwt) – down from 11.0 million tonnes in 2014 – before increasing to 11.3 million tonnes cwt next year.
Cattle slaughter and beef production has been in decline in the US over the last few years, accentuated in 2014 and 2015 by cow and heifer retention, as herds have reached their lowest numbers in decades. Historically high prices for calves (for feeding) in the last 18 months have encouraged breeding activity, limiting productive capacity in the short term, but indicating that US cattle producers will be aiming to increase production over at least the next few years.
Price forecasts
The average annual price for fed steers grading Choice in 2014 was 340.75US¢/kg live weight (lwt), and is forecast to average between 348–357US¢/kg lwt in 2015 and 342–368US¢/kg lwt in 2016. Prices for feeder steers have been even stronger, as lot feeders have had to bid up to keep numbers in feedlots, and grain prices fell over the last two years. In 2014, feeder steers averaged 447.17US¢/kg lwt, and are forecast at 476–487US¢/kg lwt in 2015 and 487–500US¢/kg lwt in 2016.
Consumption and trade impacts
A few major impacts of the lower US beef production in 2014 and 2015 have been declines in US per capita beef consumption and US beef exports, while beef imports have jumped dramatically. Should the increase in production occur next year, these trends are also forecast to reverse, with per capita beef consumption growing from 24.6kg retail weight per capita in 2015 to 24.9kg retail weight per capita in 2016; and imports falling from the historically high 1.56 million tonnes in 2015 to 1.36 million tonnes in 2016.
