AS the world’s largest exporter of grainfed beef, the United States, ramps up the volumes it ships offshore over the next decade it will have Australia’s prized high-end Asian markets firmly in its sights.
The US Department of Agriculture’s deputy chief economist Warren Preston painted a robust picture of his country’s beef production forecasts at this year’s Bureau of Agriculture Resource Economics and Sciences (ABARES) Outlook conference in Canberra.
Record US meat, poultry and dairy production would look to export markets, he said.
US beef exports are expected to grow by 37 per cent over the next decade and to account for an increasing portion of total supply.
Mr Preston presented UDSA data showing in 2008, total red meat and poultry exports sat at 14.5pc of supply, this year that would be 14.8pc but by 2026 it was expected to grow to 15.9pc.
The US beef industry is also acutely aware that China and Hong Kong are showing by far the largest beef import growth in the world.
Speaking after the conference, Mr Preston said there was no doubting “China was the big dog on the block.”
“We have a high quality fed beef product so high-end markets are where we are looking,” he said.
On another of Australia’s key beef export fronts - grinding beef to the US - Mr Preston also had a confronting message, although it was somewhat sandwiched in news that import demand is expected to rise.
Brazil, which last year regained access to the US after being shut out on account of disease concerns, is biting at the bit.
“We import a lot of lean beef from Australia. It adds value to our ground beef product and that has always been a valuable relationship,” Mr Preston said.
“But this is a small margin business and price will carry the day. Keep in mind JBS is our biggest packer and it has strong Brazilian links. There is a capacity constraint there currently but if Brazil can produce and supply at a cheaper cost, packers will switch.”
More reassuringly, Mr Preston felt there would be “no tearing up of ag trade agreements”.
Record production has built stocks
Meanwhile, the short term outlook for the major commodities in the US is one of lower prices courtesy of built-up stocks.
Production has outpaced consumption for the past four years for wheat, corn and soybeans, Mr Preston said.
Consumption for most commodities had increased but had simply not kept pace, he said.