Global beef trade reflects the comparative advantage of beef producing countries, the demand of beef deficit countries, the balancing of preferences for specific beef products and the logistics between trading partners, said Derrell Peel, Extension livestock marketing specialist, at Oklahoma State University, in a letter called Cow-Calf Corner.
It is a complex set of economic forces but the gains from trade benefit beef producers and consumers worldwide when markets are allowed to function without impediments and seek the highest value for beef products, Peel said.
TOTAL POPULATION A FACTOR
The population of a country is a factor affecting beef trade in that country, he said. Population and per-capita consumption drive total consumption.
For example, China has relatively low per-capita consumption but is a large beef consumer and importer by virtue of a large population, Peel said. In contrast, the US is the second largest beef consumer with a population one-quarter of China but per-capita consumption roughly 4.5 times higher.
Countries with large beef industries tend to be large beef consumers, he said.
India is an exception simply because much of the population does not consume beef, and many of the cattle are not part of the commercial herd, Peel said. India is, however, the third largest beef exporter, much of which is carabeef, meat from water buffalo.
HUMAN VS CATTLE POPULATIONS
One general indication of beef trade is the population relative to cattle inventory of various countries, Peel said. Countries that have large populations relative to the size of their cattle industry frequently are beef importers.
It also depends on their general preferences and tendency to consume beef, he said. The highest people to cattle ratios are in Japan, China and South Korea. These countries rank 1, 3 and 4 for beef imports.
Total beef imports in Japan and South Korea were 143% and 166% of domestic production, with China imports equal to 52%, Peel said. The UK is the number five beef importer and has a relatively high people/cattle ratio, with imports representing 56% of production.
The US, along with the EU and Canada, ranks as a top 10 beef importer and exporter, he said. In the US, bilateral beef trade reflects the diversity of beef products, with exports and imports of specific products helping to balance consumer preferences to domestic production.
That adds value to US producers and consumers by seeking the highest value across a wide range of beef products, Peel said. The US exports a mix of high-value cuts, end meats and offals, and imports mostly processing beef to support the enormous ground beef market, along with some specialty cuts.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $219.93 per cwt to $229.22, compared with last week’s range of $220.35 to $227.53 per cwt. FOB dressed steers, and heifers went for $344.06 per cwt to $355.21, compared with $342.45 to $357.95.
The USDA choice cutout Thursday was up $1.38 per cwt at $360.97 while select was up $0.67 at $348.95. The choice/select spread widened to $12.02 from $11.31 with 62 loads of fabricated product and 19 loads of trimmings and grinds sold into the spot market.
The USDA-listed the weighted average wholesale price for fresh 90% lean beef was $380.61 per cwt, and 50% beef was $124.75.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.15 to $1.25 a bushel over the Jul corn contract, which settled at $4.63, up $0.02.
The CME Feeder Cattle Index for the seven days ended Wednesday was $295.69 per cwt, down $1.95. This compares with Thursday’s May contract settlement of $295.40, down $0.90.