US beef: tight supply and stable demand to support global beef prices
The beef herd in the United States has been in consistent decline since 2019, standing at 86.7 million head in the January 2025 inventory, down 0.6% on the year and down by 9% from 2019.
The reasons for this long term contraction in supply are multiple; it is in part caused by the destocking phase of the cattle cycle, and also in part due to rising input costs and droughts forcing ‘cattle-calf’ operations to contract thus reducing the cattle available for feed-lots.
In their February 2025 outlook, the USDA reported that the ratio of beef heifer replacements to the previous year’s calf crop was continuing to fall as historically high beef prices encourage heifers onto the feeder market. This would suggest that the tightness in supply is likely to persist.
In spite of this smaller herd going into 2025, US beef production is projected to remain relatively strong, supported mostly by significantly increased carcase weights as producers chase the high beef prices.
The number of calves available for beef production are also higher than anticipated levels and are predicted to support production in the third and fourth quarters of 2025.
However, these factors have not overcome the overall trend of declining cattle numbers, and as such, the USDA expect 2025 production levels to be 2% down on 2024 levels to 12 million tonnes.
With these lower production levels US prices are expected to remain elevated throughout 2025. In the week ending 7 February 2025, the five-area deadweight steer average was $7.19 /kg (£5.59/kg) up 87 cents (14%) on the year.
This is significant for beef producers across the world as the strength of the US market has been a major driver of global prices over the past two years.
Despite being home to the world’s largest fed-cattle industry, the US is a net importer of beef. In 2024, the US imported 1.64 million tonnes of beef, with the largest proportion (24%) originating from Australia, a 6% year-on-year growth in volume terms. This was followed closely by Canada, Mexico and Brazil supplying 23%,15% and 13% of imported beef volumes respectively.
Indeed, as North American herds continue to decline, the Australian herd is rebuilding and has identified the USA as a key beef market for a variety of products including exports of frozen, grassfed, and manufacturing beef.
The US market has only been re-open to beef from the United Kingdom since 2020, when BSE restrictions were lifted. Since then, UK exports to the US have increased modestly, totalling 1041 tonnes in 2024 with a value of £5.8 million, with import tariffs on UK beef likely to restrict significant growth.
The US exported approximately 1.2 million tonnes of fresh, frozen, processed and offal beef in 2024, valuing over £8 billion, representing a 0.4% reduction in volumes from 2023. The primary destinations for this product are Japan, South Korea, Mexico and China, with these 4 countries representing 68% of the US beef export market. The United Kingdom imported only 1970 tonnes of beef from the US in 2024.
Consumer demand for all categories of beef is expected to remain very strong across the US in the coming months, supporting global prices whilst supplies remain tight.
Whether or not US herd numbers have reached their lowest remains to be seen but will affect the entire global beef industry in terms of global export flows and supplies. The USDA forecasts a 7% decrease in export volumes in 2025 to 1.3 million tonnes and an increase in import volumes of 3% to 2.2 million tonnes year on year, reflective of the tightness in supplies.
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