US beef exports reached a record high so far this year, buoying beef prices. Whether that heady export pace extends into 2022 will depend largely on China continuing its appetite for US beef.
US beef exports are up 20% to 848,000 tonnes (1.87 million pounds) through September compared with the prior year, which is 10% above the previous record from 2018. Driving the increase are exports to China, which jumped sevenfold in the latest period. For all of 2021, total sales commitments to China, representing accumulated plus outstanding sales, are up 9% from last year to 310,000 tonnes.
Given its key role in global trade flows, China’s protein import demand has repercussions for US consumers and restaurants, as well as beef processors’ profit margins. A reduction in China’s beef import demand, or a shift in beef origin countries, could further pressure US beef prices.
View Gro’s Beef Primal Prices display for a current read on price for varying cuts of meat.
Shipments to traditional US beef buyers, including South Korea, Hong Kong, and Mexico, have also increased.
US beef prices, while still elevated, are already some 20% below a recent peak in August, as Gro predicted here. US ranchers expanded their herds. They also moved cattle into feedlots at a faster rate as drought conditions devastated pasturelands in some states.
The US increased beef exports to China in 2020 as China’s domestic pork supplies decreased and imports from traditional suppliers decreased. Today, China relies on several countries for beef imports and could again shift origins. Even as imports from the US shot up in 2021, China’s beef purchases from Australia dropped sharply amid a diplomatic dispute. In addition, Argentina, one of the biggest exporters of beef, limited beef exports in mid-2021 in an effort to quell domestic food inflation, as Gro wrote about here.
Gro expects China to reduce other meat imports. China’s hog herd recovery following the 2018 African swine fever epidemic has increased domestic pork supplies and pushed pork prices lower. Gro is forecasting that China’s pork imports will drop sharply next year to pre-ASF import levels, contrary to the USDA’s forecast for higher pork imports, as Gro highlighted in this Insight article.