Strong global protein market drives meat production expansion

The growth in American beef and pork is based on export markets

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Strong demand continues for beef around the world, along with other proteins. That’s kept prices decent globally despite growing supplies.

“The global demand for beef is very very strong,” says John Baker, the director of Business Development with the Ontario Corn Fed Beef program. He also works with the combined beef marketing committee of the Ontario Cattle Feeders Association and Beef Farmers of Ontario. “We’ve never seen demand globally for beef as we have today. It’s the strongest protein market we’ve ever seen.”

Why it matters: Beef demand continues strong around the world despite groups actively working against beef consumption.

Ontario produces 20 per cent of the country’s beef, but only has 18 per cent of its processing capacity, meaning that there’s not the local processing demand to push growth in Eastern Canada.

American beef production is “record large” said Perillat at the recent Beef Farmers of Ontario (BFO) annual meeting. It looks, however, like the growth in the American cow herd is slowing, with a one per cent decline in 2019.

Western Canada has had a basis advantage over anywhere else in North America for the past few years, caused by significant processing capacity there. That’s led to the re-opening of feed lots and the construction of new ones there.

Ontario cattle feeders have a feed cost advantage over the west, but the price paid isn’t as strong.

The growth in beef has been fueled by exports, in Canada and the United States. Last year Canadian beef exports grew 10 per cent by weight and 17 per cent by value, says Perillat. That means $1 billion more in export value over the past several years.

Reasons for continued global strength in protein prices

Perillat says there are reasons for continued optimism for global protein demand and prices.

The dramatic drop in the swine herd in China due to African swine fever will mean a need for protein for China. ASF created the first decline in global meat production in 50 years.

The coronavirus COVID-19 in China has caused instability with some farms, such as those producing poultry, having difficulty with staffing and product movement.

Australia, the largest exporter of beef to North America has lost half its cow herd since 2012, due to several issues, including drought. Australian beef exports are expected to drop 15 to 20 per cent in 2020.

The U.S. continues to export more beef and North American protein markets need that to continue. American pork production has risen by about 25 per cent since 2014 when it was knocked back due to a Porcine Epidemic Diarrhea outbreak that reduced production. It’s expected to grow another five per cent this year.

“There is some risk to this market when they are producing that much,” says Perillat.

About the author

Editor

John Greig

John Greig has spent his career in agriculture journalism and communications. He lives on a farm near Ailsa Craig, Ontario. Contact John at [email protected] or follow him on Twitter @jgreig

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