US beef production expected to rise for another year
Cattle inventory in the US has increased in the last four years by 2.8 million head and an additional 200,000-400,000 head are expected to be added to the herd over the next few years, according to a forecast presented at the Cattle Industry Convention. The CattleFax analysis predicts that 2018 is going to be another good year for the industry even not as good as expected by stakeholders.
"“This year, 2018, will be the largest beef production year in our history. That will build as we go into the end of the decade. We have a higher percentage of cattle hedged than we have most years. We don't expect the basis to be as strong as it was last year but it will still be positive", explained Randy Blach, CattleFax CEO, during the Convention.
Trade seems to be one of the challenges that will bring more volatility on the market, despite the fact that the American meat industry is meeting a strong demand in the global market.
"The global market wants what we have. It wants more of the pork. It wants more of the poultry. It wants more of the high-quality beef we produce in this market. But we do have to have a level playing field. We have to have access to export markets. If we didn’t trade or export in 2018 you are talking about needing to consume 18 kg more of protein", said Blach, quoted by Drovers.
According to the analysis, total slaughter looks to rise 3.7% to 33.5 million head while carcass weights are expected to rise 4.5 kg on average. Beef production is slated to rise 5% to almost 590,000 tonnes. On the long term, beef demand looks to be very robust as the markets have corrected back from the all-time highs registered in 2014-2015. Retail prices will likely only drop 1% in 2018 but the exports represent the wild card for the beef industry as USA is facing a strong competition in Japan and Middle East markets and the NAFTA agreement it is in danger.
(Photo source: Pixabay)
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