AUSTRALIA, North Sydney. The US beef supply is recovering, while Brazilian shipments are yet to falter. ASF continues to bolster global meat demand.
After falling drastically through May, US beef supplies have recovered rapidly, while Brazilian exports are yet to reflect any indication of a reduction in cattle slaughter. Although many underlying drivers of strong demand remain largely intact, competition in key export markets may increase in coming months.
At a time when Australian beef supplies are tightening, US product will likely compete strongly in Japan, Korea, Taiwan and the US domestic market to varying degrees in the coming months. Meanwhile, Brazil and Argentina will continue expanding their presence in China and increase enquiries into other major Australian export markets.
June trade data may be more telling of the trade shortfall caused by a collapse in US production, given the time lag between US slaughter and product arriving in Asian markets. Weekly US beef exports (as reported by the USDA and only covering beef cuts) indicates shipments remained low up to mid-June. However, the USDA reported a 10,000 t swt week-on-week spike in export volumes for the seven days ending 18 June, an 84% rally on the prior four-week average.
While Covid-19 has had a profound impact on the retail and foodservice landscape in China, the rate of beef imports are yet to slow, with May marking the 47th consecutive month of year-on-year growth.
Calendar year-to-May China imports were up 45% year-on-year, at 821,000 t swt. Import growth has been led by Brazil and, to a lesser extent, Argentina, with trade increasing 131% and 51% respectively. China imports of Australian beef also recorded solid growth in the first five months of 2020, up 35% year-on-year, but figures are yet to reflect the trade slowdown from the temporary delisting of four plants.
Supported by an emerging middle class and supercharged by the spread of African Swine Fever (ASF), China has emerged as the largest imported beef market over the last few years. While Covid-19 has dislodged ASF from media headlines, it remains as critical as ever in underpinning global meat markets. While there have been some reports of integrated pig growing facilities operating successfully under increased quarantine measures, the pig herd remains severely depleted compared to pre-ASF levels.
The recent rise in Covid-19 cases out of Beijing is of some concern for meat demand in China, however, imports remained strong through the initial wave across the country and during the subsequent lockdown.