More space opens up to be able to export meat to the United States.

The United States could not supply 400 to 500 thousand tons of meat, either with its own domestic production or with shipments from countries such as Argentina and Brazil. Nor were there many options to import from regular markets like Mexico and Canada, or from other options like Australia and New Zealand.

According to the most recent report by Rabobank (quoted by Beef Central) on Beef Industry Projections for Q4 2022 to Early 2023, US May Experience a Possible Annual Loss of Beef Production 400,000 to 500,000 tons.

Analyzing the current situation in the United States, he highlighted that the livestock supply today is adequate but buyers are concerned about future declines. Furthermore, high meat prices will continue in 2023, even if consumer interest in this product remains.

In fact, the liquidation of the country’s cattle herd is nothing new and has been discussed in every new Rabobank report. But over the past 4 years, continuous slaughter and minimal maintenance of heifers has done little to reduce beef production.

Therefore, the Dutch bank expects beef production to decrease reach the tipping point in 2023, raising prices even more and causing a decrease in supply. (Laws: Brazil will consume more beef in 2023, according to Rabobank)

In his view, American consumers are likely to continue eating beef as long as they can afford it. But there is no doubt that ever-shrinking incomes coupled with rising prices and stagnating minimum wages will affect consumption.

Who Will Satisfy US Consumers’ Appetite for Beef?

Faced with a possible contraction in domestic meat production, the United States will turn to its neighbors Mexico yes Canada, the two largest suppliers. However, Canada is also in its liquidation phase and may not be able to supply enough.

Australia yes New Zeland, the third and fourth largest vendor in the United States and major markets globally, are the next logical choices. (Laws: These were the meat exports of Brazil, Paraguay and Uruguay in the first half of 2022)

But beef production in New Zealand is expected decrease by 4% between 2023 and 2025. In turn, Australia’s recovery from its liquidation phase has been prolonged, with no one knowing whether it will have the livestock available to produce the same volumes as before.

What about the new suppliers? Europe is not a big supplier The US and RaboBank expect EU and UK beef production to continue their structural decline at an annual rate of around 0.5% over 2023-2025.

This goes away South America, which has volumes available but lacks the necessary trade access to close the U.S. manufacturing gap. It is expected that the production of Brazil grow in the coming years, but that of Argentina would decrease and then stabilize.

combined, these two major South American exporters will not increase production enough to offset the decline in the United States.even if trade agreements are modified to increase the exportable volumes from South America.

As a result, declines in US beef production may not be offset by production growth in other major exporting countries. (Laws: Beef exports to fall 1% and imports 2% in 2023, says USDA)

This is without considering any other increase in global beef demand during the same period. Consumers will have to pay to access what is available, given supply pressures in many markets, which could create a strong price advantage and a redistribution of trade volumes.