Livestock and Poultry World Markets and Trade

New countries have been added to the beef and veal PSD to reduce the gap between total imports and total exports by selected countries, writes the United States Department of Agriculture Foreign Agricultural Service.

2 May 2008

4 minute read

Beef and Veal: 2008 Revised Forecast Overview

These additional countries have data for 1996 to 2008 and are included in this circular as well as in the PSD Online. As a result, any comparison between the 2008 forecast published in November and the revised 2008 forecast should take this modification into account.

Production

Beef and veal production for selected countries is forecast at 61 million tons. Production by Brazil and China are revised significantly downward and gains are forecast for the European Union and the United States.

United States is increased 2 percent (260,000 tons) to 12.1 million tons due to robust cow slaughter and elevated cattle weights.
China is dropped 4 percent (335,000 tons) to 7.7 million tons largely due to weather-related losses.
European Union is boosted nearly 3 percent (225,000 tons) to 8.1 million tons as decreased imports from Brazil, strong domestic demand, and elevated prices will stimulate production.
Brazil is lowered over one percent (140,000 tons) to just over 9.7 million tons as expansion is constrained by challenges to export growth stemming from new restrictions imposed by the EU-27.

Consumption

Brazil is raised 4 percent (315,000 tons) to just more than 7.5 million tons as European Union restrictions on Brazilian beef exports will positively impact domestic consumption by the exporting powerhouse.
China is lowered nearly 4 percent (287,000 tons) to almost 7.7 million tons. Despite rising incomes and increasing consumption of meals away from home where most Chinese consume beef, higher prices resulting from the disease-related disruption in the pork sector will dampen demand.

Exports

Exports are revised 4 percent downward to nearly 7.7 million tons. European Union restrictions on Brazilian exports, continuing BSE-related restrictions on North American beef and continuing drought in Australia negatively impacted the revised forecast.

United States is lowered 11 percent (89,000 tons) to 687,000 tons. Despite the weak dollar and strong sales to Mexico, export growth is dampened as sales to Japan and Canada are not expanding at the same rate as experienced in 2007.
Brazil is dropped 17 percent (450,000 tons) from the November forecast. The plunge in the forecast is a result of European Union restrictions on Brazilian exports due to sanitary concerns. It should be noted that while the 2008 forecast was significantly lowered, Brazilian exports are expected to be 2.2 million tons which is largely unchanged from 2007. Although Russia is Brazil’s largest market, the European Union accounts for a significant portion of Brazilian sales. Brazilian exports to the European Union will decline in 2008 although prepared/preserved meat is not subject to the restrictions and a number of farms have now been approved to ship. Brazilian exporters will make up for this loss through increased sales to other markets in Asia (Hong Kong and Philippines), the United States (prepared/preserved beef only), and Africa and the Middle East (Iran and Egypt). As with prior years when faced with trade restrictions due to foot and mouth disease (FMD) outbreaks, Brazil will inevitably pursue access to and growth in non-traditional markets to sustain exports.
Canada is decreased 18 percent (100,000 tons) to 450,000 tons due to reduced slaughter, diminishing price competitiveness due to a higher valued Canadian dollar, continuing BSE-related restrictions, and increased cattle exports to the United States.
European Union is slashed 75 percent (75,000 tons) to 100,000 tons as trade restrictions on imports of Brazilian beef will reduce export sales in order to fulfill domestic demand.

Imports

Beef and veal imports are forecast at 7.2 million tons. Imports by major markets are generally down (U.S., Japan, European Union, Korea) or increased slightly (Russia and Mexico).

United States is dropped 11 percent (222,000 tons) to just over 1.3 million tons as increased domestic slaughter coupled with a weaker dollar will decrease imports.
Japan is reduced 10 percent (75,000 tons) to 650,000 tons as decreased Australian exportable supplies of grain-fed beef and continuing restrictions on U.S. beef as well as the relatively high price of U.S. beef will constrain import demand.
European Union is cut a sharp 27 percent (200,000 tons) to 550,000 tons due to restrictions on Brazilian exports. While other South American suppliers such as Uruguay are anticipated to increase their market presence, they will not be able to fulfill the gap left by diminished sales by the EU’s principal supplier.