If US-China Relations Fixed, Beef Demand Could Grow Exponentially - Unless Recession Gets in WayThu, 07 Mar 2019 11:34:48 CST
Kansas State University Extension Grain Market Economist Dr. Glynn Tonsor says that as he continues to follow beef demand, the numbers have come together to show just what an incredible year 2018 was on the domestic front and especially the international market.
“In 2018, eight of the twelve months were better than in 2017. So, domestic beef demand was strong in 2018. Even more, US beef export demand was stronger yet. The US Meat Export Federation reported a 15 percent increase in the value of exports. That’s really good,” Tonsor said. “We did that despite the fact that we have less than 2 percent market share in China - which represented 80 percent of the growth in beef trade last year.”
However, Tonsor speculates that 2018 could have been exponentially better for the beef industry had the US been better positioned in its relationship with China. While we may have missed the boat last year in that respect, Tonsor says, that same opportunity lies ahead of us if ongoing trade negotiations can be resolved and the trade war put to an end. Tonsor believes that even if components specifically for meat are excluded from a final agreement, any terms made between the two countries will have a significant impact on beef exports regardless.
“If you reduce some general trade uncertainty with two major powers - the US and China - you’re probably going to enhance GOP in both countries and that has a notable impact on meat trade,” he remarked, but warned of the opposite effect that a rumored global recession could have too. “If demand takes a hit in 2019 because of some macroeconomic shock, we fail to improve trade relations or sustain current good trade relations… all of those will hamper cattle prices.”
Listen to Tonsor’s full analysis of last year’s beef demand profile and his outlook on current conditions moving through the year ahead, with Radio Oklahoma Ag Network Farm Director Ron Hays, on today’s Beef Buzz - brought to you by the American Angus Association. America’s breed.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network and is a regular audio feature found on this website as well. Click on the LISTEN BAR below for today's show and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
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