According to USDA's latest livestock sector projections over the next 10-year period reflect increasing production, strong domestic demand and strengthening exports for meat. Meat exports grow through the projection period as global incomes rise and meat demand increases.
Higher grain prices reduce returns to U.S. meat producers and slow production gains. Higher levels of per capita meat consumption are projected, with poultry accounting for a larger share of the total. While consumer expenditures on meat increase, they represent a declining share of disposable income.
The baseline assumes a gradual rebuilding of U.S. beef exports to Japan and South Korea. While overall meat exports benefit from stronger foreign economic growth in the baseline, U.S. beef exports do not return to levels attained prior to the December 2003 discovery of bovine spongiform encephalopathy in Washington State.
U.S. beef exports primarily reflect demand for high-quality fed beef, with most U.S. beef exports typically going to markets in Pacific Rim nations. The loss of those markets following the BSE case in the United States in late December 2003 caused U.S. beef exports to be sharply reduced. However, with a gradual recovery in U.S. beef exports to Japan and South Korea assumed in the baseline, U.S. beef exports are projected to rise slowly.
U.S. imports of processing beef from Australia and New Zealand decline in the baseline as more, lower quality processing beef comes from domestic sources with the rebuilding of the cattle herd. The United States is a net beef importer by volume throughout the projections as the recovery of high-quality fed beef exports does not reach prior levels.