2021 and 2022 were good years for beef exports. Dr. Derrell Peel, livestock market economist with Oklahoma State University, talks about what’s ahead in 2023.
“The general pattern doesn’t change a great deal. If you look at the major beef exporting countries, Brazil is expected to continue being – by a significant amount – the largest beef exporting country. Now in 2022, it looks like the U.S. was probably number two. That’s a little unusual. We have not been that high. We’re usually third or fourth place. As we go forward, Australia is in recovery mode. Their exports are expected to increase next year, India’s still in there, so the U.S. may actually fall back in terms of ranking a little bit, and our exports could drop slightly. But the bottom line is it looks pretty good going forward.”
There should be a lot of export opportunities in the global marketplace during the next year according to Dr. Peel.
“On the importing side, of course, China-Hong Kong has emerged in the last six or seven years, by far, as the largest importing country even though it’s slowing down. And China has had lots of issues with COVID restrictions there, their economy has struggled a little bit further, growing more slowly and may decrease slightly. But again, they’re at a very high level. The U.S. is the second-largest beef-importing country, and our imports actually might pick up a little bit next year. With declining beef production and high prices in the U.S., we may see a slight increase in beef imports next year. And then Japan and South Korea are the number three and four markets, so, in general, the global beef market still looks pretty strong.”
He says the 2023 beef market is going to be “sharply different” than 2022.
“We’ve kind of got all the pieces in place here right at the end of 2022 to see this thing really kind of turning the corner, if you will. We’re gonna see higher prices for cattle. We’re gonna see margin squeezes in the middle of the industry, so packer margins and feedlot margins are going to be under some pressure going forward. We’re gonna have higher cattle prices, but on the top end, there will be some limitations on the demand side just because we’ve got potential recession, we’ve got inflationary pressures on consumers, and so there’ll be some squeezing in the middle of this thing.”
Despite challenges in the new year, there will be opportunities for profitability.
“I think cattle producers in general, cow-calf and stocker producers, have a potential for better profitability in 2023. Obviously, we’ve got input cost as well, so cost management is going to continue to be a priority for us to take advantage of the stronger markets, but the supply fundamentals on the cattle side are going to be very supportive to cattle markets in the coming year.”