Source:  Rita Jane Gabbett, MEATINGPLACE.COM, 2/21/11

Beef production will continue to decline through 2012, then rise through 2020 as strengthening returns support herd rebuilding, USDA projected in its “USDA Agricultural Projections to 2020” report.

Despite improved returns for cow-calf operators in 2010, strong demand for feeder cattle and cows for slaughter have limited producer interest in expanding beef cow inventories after several years of declines. Thus, reduced inventories and expected heifer retention during 2011 are expected to lead to reduced beef production through 2012.

Beef production will then rise in the remainder of the projection period as strengthening returns support herd rebuilding. Beef cow numbers rise from about 31 million head at the beginning of 2011 to over 34 million by 2020, USDA projected.

The total cattle inventory will drop below 92 million head before expanding to about 96.7 million at the end of the projection period. Rising slaughter weights will also contribute to the longer term expansion of beef production.

Although feed prices are expected to decline from current levels, USDA expects continued historically-high feed costs to result in stocker cattle remaining on pasture to heavier weights before entering feedlots.
Per capita beef consumption is expected to decline through 2013, before rising moderately over the remainder of the projection period. The initial decline reflects continuing reductions in beef production through 2012 coupled with expanding exports. However, as beef production increases in later years, per capita consumption grows, according to the report.

Beef exports, imports
USDA expects continuing increases in U.S. beef exports to Japan and South Korea, as those markets continue to recover from market closures after the first U.S. case of bovine spongiform encephalopathy in December 2003.

The report noted that beef exports by competitor countries Australia and Canada will also increase slowly as herds there rebuild.

U.S. imports of processing beef from Australia and New Zealand are also expected to increase between now and 2020.

With more beef demand in East Asian markets being met by the U.S. grain-fed beef, exports of grass-fed beef from Australia and New Zealand to those markets will decline, freeing more of that product for sale to the United States, the report projected. In addition, moderate beef cow inventories and beef cow slaughter in the United States will raise import demand for processing beef, the report projected.

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