The United States will be a net beef exporter beginning this year, an indication of an increasing dependence on foreign markets as U.S. beef production expands aggressively relative to domestic consumption, Rabobank said in a report providing a long-term cattle outlook.
Following a severe liquidation intensified by drought in 2011 and 2012, the U.S. cattle herd has been in a robust rebuilding mode continuing since 2014 and that — given stabilized corn prices, higher domestic per-capita consumption and continued expansion of exports — will continue through 2019/2020, the report projects.
The beef cow herd is likely to remain at or above 30 million head from 2020 through 2025. Meanwhile, another liquidation phase is forecast to begin in 2020/2021 to compensate for downward price pressure from high supplies and total slaughter expected to peak in 2022, ultimately increasing beef production by as much as 10 percent over 2016 levels by 2022.
Lower retail prices and better economic conditions bumped up per-capita beef consumption to 55.5 pounds (on a carcass basis) in 2016, a 3 percent boost from the low point of 54 pounds in 2015. Increased production from herd rebuilding is expected to accelerate the trend by 4 percent to 5 percent, or about 58 pounds per capita, by 2020.
However, as beef production levels spike, and then go down, added pressure from lower chicken prices will force consumption to settle near 56 pounds per capita long term. The result is an expected increase in domestic consumption of 7.8 percent, or more than 2 billion pounds, through 2022. Nonetheless, total consumption of animal protein in the U.S. is not expected to grow much beyond the old peak established in 2008.