Economic Tidbits

African Swine Fever Helps U.S. Beef Trade

Recent USDA projections show the U.S. beef trade surplus with the rest-of-the-world will grow in 2020 due to African Swine Fever (ASF) in Asia.

ASF will mean more demand for U.S. products, but it also means less U.S. beef imports as protein supplies flow to Asia to offset the decline in pork production.

Beef production this year is expected to finish at 27.12 million pounds, up 0.6 percent over last year. The growth is less than what was expected; weather, lower weights, and lower slaughter numbers all contributed to slower production growth. Beef imports are projected to finish the year at 2.96 million pounds, beef exports at 3.10 million. Thus, the U.S. is expected to end the year with a slight trade surplus in beef. Domestic per capita consumption of beef this year is projected at 57.3 pounds, one-tenth of a pound higher than last year. The growing economy and personal income growth provided consumers with more dollars to spend on beef.

The USDA projects 2020 beef production at 27.61 billion pounds, 1.9 percent higher. Exports are expected to grow 6.5 percent, or total 3.3 billion pounds, accounting for 12 percent of production. The U.S. is expected to expand its market share in Japan, South Korea, and Taiwan, due to Australian supply problems, Chinese demand, and the trade pact with Japan. U.S. imports are forecast to be down 3 percent to 2.87 billion pounds because of increased demand in Asia due to African Swine Fever which will divert protein supplies to Asia. Per capita domestic beef consumption is forecast to grow to 57.7 pounds, despite the competition from non-meat protein sources. Finally, the average of the 5-area direct price for fed cattle is expected to increase through the first quarter of the year then fall throughout the rest of the year, averaging $116/cwt., the same as this year.

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