While global pork exports were expected to suffer a setback in 2022, the outlook is increasingly grim, said the USDA’s Livestock and Poultry: World Markets and Trade report Tuesday.
This month, 2022 China imports were revised downward nearly 1.4 million tonnes from the April forecast to about half of 2021 levels because of moderate recovery in China pork production, the report said.
CHANGES IN CHINA’S PORK SECTOR
China was forecast to remain the world’s leading pork importer, accounting for 20% of global shipments, albeit down significantly from 42% of trade share in 2020, the USDA said. The sharp plunge in China buying leaves major exporters like the EU, Brazil and the US searching for markets to offset diminished trade to China. With limited alternative markets that can absorb sizeable volumes, global pork trade was expected to fall 13% this year.
The changes in the China pork industry also have a mixed effect on other meats, the report said. China’s 2022 chicken meat imports were revised lower as consumers return to eating more pork, the preferred animal protein in China.
However, the effect of the year-on-year decline in China chicken meat imports was far more muted than for pork, the USDA said. China is a relatively small player in the global chicken meat trade, accounting for only 5% of global shipments as the world’s fifth largest importer.
As such, major chicken meat exporters were expected to offset the decline in sales to China with shipments to other markets, the report said.
Global pork production this year was forecast at 110.7 million tonnes, virtually unchanged from the previous report as an upward revision in China offsets declines in the EU and Brazil, the USDA said.
CHINA BEEF IMPORTS SEEN RISING
On the other hand, China’s 2022 beef imports were forecast to rise 3% as demand remains relatively unaffected by changes in the pork sector, the USDA said.
The USDA’s global beef production estimate for this year was virtually unchanged from the last report at 58.7 million tonnes, the report said. Elevated global beef prices continued to incentivize slaughter among major producers.
Improved rainfall has encouraged Australian producers to retain more heifers for breeding, but beef production still was expected to increase over last year’s historic low, the USDA said.
Global beef exports this year were forecast to be up 1% to 11.9 million tonnes, the USDA said. Brazil was forecast to export a greater portion of its production on firm China, Egypt and US demand.
Although global beef import demand remains strong, inflationary pressures and persisting logistical issues have tempered greater demand expectations amid many countries lifting COVID-19 restrictions.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $137.00 to $149.83 per cwt, compared with last week’s range of $138.00 to $148.92. FOB dressed steers, and heifers went for $217.97 to $221.85 per cwt, versus $217.96 to $226.88.
The USDA choice cutout Wednesday was down $0.46 per cwt at $268.05, while select was down $0.91 at $241.26. The choice/select spread widened to $26.79 from $26.34 with 94 loads of fabricated product and 24 loads of trimmings and grinds sold into the spot market.
The USDA said basis bids for corn from feeders in the Southern Plains were steady at $2.75 to $2.85 a bushel over the Sep futures and for southwest Kansas were steady at $0.10 under Sep, which settled at $6.00, up $0.06.
The CME Feeder Cattle Index for the seven days ended Tuesday was $172.30 per cwt up $0.96. This compares with Wednesday’s Aug contract settlement of $180.80, up $1.22.