One major contributing factor to increasing demand comes from outside the borders of the United States. Stuart said business in the international marketplace is growing quickly as improvements to infrastructure and logistics are made. Beef exports are witnessing substantial growth with 75% of all US beef exports going to Mexico, Canada, South Korea, Japan and Vietnam.
“Korea is very aggressively buying beef from the US,” said Stuart, adding that the foot-and-mouth disease issue is causing substantial reductions in South Korea’s domestic meat supplies. “Last week we had outstanding sales to Korea at 24,000 tons, which is up from 9,000 tons a year ago,” he added.
Increasing demand from outside the US will continue the upward trend, Stuart predicted. He suggested an 8% to 10%increase in US beef exports in 2011 compared to last year. He said it could even surpass his expectation.
“I am not saying exports will be up 18% [from 2010], but I'm not saying they won't be,” he said.
Kevin Good, market analyst for Cattle Fax, said 2011 will be another year of tighter supplies and a “very mild” cow herd reduction. He added stabilization is also in sight, projecting the early half of the year will bring continued reduction but suggested the decline will simmer in the latter half of 2011. The smaller herd is a “double edged sword,” according to Good.
“Demand will be a notch better this year,” he added. “Total domestic supplies will be lower this year than last. I am very bullish on price, which is good. But we have to start retaining heifers and rebuilding the cowherd to meet this demand and compete globally.”