The global beef market will experience shortages in 2022

According to the Vietnam Industry and Trade Information Centre (Ministry of Industry and Trade), Rabobank’s latest report regarding the global beef market in the fourth quarter of 2021 and predictions for 2022 shows that the global beef market in 2022 may continue to experience scarcity. The main reason is due to the contraction of the beef production industry in the USA which will create tension for markets with high import demands for beef.

The total cow herds in the USA peaked at 98.4 million heads in 2019 but was followed by a sharp decline in 2021 due to economic hardship all across the Western US.

The number of beef cattle slaughtered has increased by 10% at present. The number of dairy cows slaughtered has increased by 2%. Increased slaughter will cause the US beef production output to drop by 2.5% in 2022.

Although the drought condition has been relieved in some areas, it will remain a major concern during the 2022 herding season. The supply of animal feed will be limited in which the price of alfalfa hay has increased to over USD 200/ton, and USD 188/ton for other types of hay.

Cow slaughtering in the US is expected to continue its increase this year while the output may continue its decrease until 2023 or even beyond. Accompanied by limited export supply from Australia, the global beef market is showing a tendency towards scarcity not only in 2022 but can also last until 2023.

Import demands for beef are on the rise in China and the USA while remaining stable in other Asian markets such as Japan or South Korea.

Retail prices of beef of all kinds in the US in October 2021 reached a record of USD 3.42/kg on average. The reason prices increased was because of rising retail demand, the reopening of restaurants and exports in constant increase. Beed price, after stabilizing at USD 120 - 125/CWT for most of the months of 2021, had finally overcome the threshold and showed an uptrend since the end of August and September before peaking. Prices on the CME exchange platform stabilized at USD 155/CWT since the middle of September 2021, then increased sharply due to the high price of animal feed.

The supply of fodder maize for next year is prognosticated to decrease. The supply of beef cattle is currently plentiful due to cows being released in late autumn. Increased beef cattle slaughtering in 2021 will cause a significant drop in supply by the end of 2022 and 2023, which poses as a major concern.