While the focus has been on competing for beef export markets between Australia and the U.S. in 2022, the real opportunity might lie in the U.S. domestic market. This year, the estimated 2.9% fall in U.S. beef production will see a shortfall of 356,000 MT of beef for domestic U.S. consumption.
Given that New Zealand beef exports are expected to be down 5.2%, Australia’s beef exports will be only 6% higher in 2022 and Brazil is expected to fill its quota allocation of 65,000 MT by late March – supply of beef to the U.S. is very tight.
Its, therefore, not only a very tight U.S. beef supply balance sheet but also a tight global beef supply balance sheet with the expectation that China is likely to be a strong buyer of beef in the first half of 2022 is likely to tighten this market even more. My forecasts have imported Aust/NZ 90’s, reaching 329 usc/lb FOB, but with recent imported 90’s prices moving to 315 usc/lb FOB my estimates may fall short. Some market participants are predicting even greater prices by mid-year with talk of a 350 usc/lb for imported 90’s by July, 2022.
The consensus is that lack of imported will drag U.S. fresh 90’s higher, and my record price of 321 usc/lb by August might also be too low.
It should be noted that Australian lamb strongly correlates to US grainfed beef prices. As US high-end beef prices move higher, so will Australian lamb prices. Both Australia and New Zealand beef and lamb exports are likely to experience strong prices through most of 2022.