Global Livestock Market Update: July 5, 2006

Strategic Insights -

The global livestock market is witnessing significant changes, with the U.S. beef demand expected to benefit from reduced supplies of competing meats in cold storage despite its own sharp gain during April and May. The U.S. Department of Agriculture reported a sharp jump in the amount of frozen beef on hand, with 434.5 million pounds of product in the freezer as of May 31, up from 318.2 million a year ago. Meanwhile, Australian beef exports have slowed due to a savage drought in 2002 and 2003 and higher slaughter rates in United States ranches amid an ongoing drought.

Key Takeaways:

  • U.S. beef demand could benefit from reduced supplies of competing meats in cold storage despite its own sharp gain during April and May.
  • The U.S. Department of Agriculture reported a sharp jump in the amount of frozen beef on hand, with 434.5 million pounds of product in the freezer as of May 31, up from 318.2 million a year ago.
  • Australian beef exports fell 4.1% in June to 83,208 metric tons from May, weighed down by declines in shipments to the two major markets of Japan and the U.S.
  • Beef production in Australia rose 1.5% in May to a seasonally adjusted 177,458 metric tons from April, but was down 3.8% from May 2005.
  • The number of pigs in Russia on July 1 was 15.2 million, an increase of 4.3% compared with July 1 2005, while the number of cows in the country fell by 5.8% to 9.6 million.
  • Canadian trade and agricultural ministers have expressed their disappointment with the lack of progress at the latest World Trade Organization (WTO) negotiations on the Doha Development Agenda in Geneva, Switzerland last week.
  • A case of anthrax was reported in the village of Istemas in the Orenburg region in Siberia, and a man was infected after contact with an animal.
  • The European Commission is launching an investigation into whether Italy's aid to farmers hit by bird flu violated E.U. rules.
  • Developing countries will be increasingly dependent on food imports over the next decade due to growing demand, according to a report by the Organization for Economic Co-operation and Development and the U.N. Food and Agriculture Organization.

Statistics:

  • 434.5 million pounds of frozen beef on hand in the U.S. as of May 31, up from 318.2 million a year ago (USDA)
  • 83,208 metric tons of Australian beef exports in June, down 4.1% from May (Meat & Livestock Australia Ltd.)
  • 177,458 metric tons of beef production in Australia in May, up 1.5% from April but down 3.8% from May 2005 (Australian Bureau of Statistics)
  • 15.2 million pigs in Russia on July 1, up 4.3% from July 1 2005 (Russian agriculture ministry)
  • 9.6 million cows in Russia on July 1, down 5.8% from July 1 2005 (Russian agriculture ministry)

Sources:

  • Dow Jones Commodities News via Comtex
  • Associated Press
  • Dow Jones Newswires
  • Meat & Livestock Australia Ltd.
  • Australian Bureau of Statistics
  • Russian agriculture ministry
  • Organization for Economic Co-operation and Development
  • U.N. Food and Agriculture Organization
  • European Commission