Global Beef Trade Economics
Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist
Beef trade in countries around the world is driven by a variety of factors including cattle inventories/beef production; population; general and product specific beef preferences; and transportation/logistics. Table 1 provides broad indicators of some of these economic forces.
Table 1. Global Beef Trade Indicators, Selected Countries.
Data compiled from United Nations, USDA-FAS, USDA ERS. Columns E and F in carcass weight equivalents.
The total size (population) of a country is a factor affecting beef trade in the country. Population and per capita consumption drive total beef consumption. For example, China has relatively low per capita consumption (Column F) but is a large beef consumer and importer by virtue of a large total population (Columns B and E). In contrast, the U.S. is the second largest beef consumer with a population one-quarter of China but per capita consumption roughly 4.5 times higher. Not surprisingly, countries with large beef industries (cattle inventory) tend to be large beef consumers, for example, China, Brazil, and the U.S. 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. India is, however, the third largest beef exporter, much of which is carabeef, meat from water buffalo.
One general indication of beef trade is the population relative to cattle inventory of various countries. Countries that have large populations relative to the size of their cattle industry are frequently beef importers. Of course, it depends on their general preferences and tendency to consume beef. Table 1 shows that the highest people to cattle ratios are in Japan, China, and South Korea (Column D). These countries rank 1, 3, and 4 for total beef imports. Total beef imports in Japan and South Korea are 143 and 166 percent of domestic production, with China imports equal to 52 percent of total beef production (Column I). The U.K is a is the number five beef importer and has a relatively high people/cattle ratio, with imports representing 56 percent of production.
On the other hand, countries with low ratios of people to cattle are more likely to be beef exporters. Three countries with the lowest people to cattle ratios are New Zealand (0.55), Argentina (0.86), Australia (1.0), and Brazil (1.14) (Column D). These countries rank 6, 5, 2, and 1 as beef exporters, respectively (Column H). New Zealand exports 90 percent of production but is not a bigger exporter simply because it is a small country and a small beef producer in total. Australia exports 73 percent of production while Argentina has high per capita beef consumption but also exports 37 percent of production.
The U.S., along with the E.U. and Canada, ranks as both top ten beef importers and exporters. In the U.S., bilateral trade in beef reflects the diversity of beef products, with exports and imports of specific products helping to balance consumer preferences to domestic production. This adds value to U.S. producers and consumers by seeking the highest value across a wide range of beef products. The U.S. exports a mix of high-value cuts, end meats and offals, and imports mostly processing beef to support the enormous ground beef market in the U.S., along with some specialty cuts. Beef trade between the U.S. and Canada also reflects the transportation efficiency of moving similar products north and south rather than east and west across the wide countries. Population centers in eastern Canada are closer to U.S. Midwest beef production, while beef production in western Canada is closer to U.S. west coast markets. Column K in Table 1 shows the shares of the major U.S. beef imports sources and Column L shows the shares of the major export markets for U.S. beef.
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. It is a complex set of economic forces but the gains from trade benefit beef producers and consumers worldwide when beef markets are allowed to function without impediments and seek out the highest value for beef products.
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