UTRECHT, The Netherlands – The demand for beef imports from China will continue in 2020, which will support global prices through the upcoming year, according to Rabobank’s Beef Quarterly Q4 2019 report.

Thanks to African Swine Fever (ASF) causing pork prices to triple from October 2018 to October 2019, Chinese beef demand is expected to be extremely strong in the upcoming year. The shortage of pork has pushed consumers toward other proteins and the increase in pork prices has made beef a more relatively affordable option. In October 2018, the retail price of beef was 2.8 times higher than pork – one year later it was only 0.6 times higher, according to the Rabobank report.

With an increased demand for more protein, China has been actively approving plants around the world for access into the Chinese market. Since Aug. 1, 22 Brazilian plants and 8 plants in Argentina have been approved. South Africa has been re-granted access and a number of European plants have gained access to the Chinese market.

Growing Chinese demand for beef, due to ASF, has increased the amount of beef trimmings from Australia and New Zealand going to China in 2019, Rabobank said. Previously a lot of this product was directed to US quick-service burger restaurants. This switch has resulted in the US quick service chains having to look for more domestic alternative for their beef supplies, which is pushing up other prices in the US, according to the report.

US import beef prices jumped in October and have reached record levels since 2014. Demand for beef in the US has been strong in 2019 and should continue into 2020, according to Rabobank.

“The market has seen substantial disruptions in 2019. Winter started early in the fall of 2018, then proceeded to be very severe, and was followed by a wet spring. Trade policy remained uncertain, and the fire at the Tyson plant in Holcomb, Kansas, caused major disruption to slaughter capacity. In spite of all this, price movements for the year followed a predictable seasonal pattern,” the report said.

Cattle slaughter was up 1.4 percent for the year, but beef production has been unchanged for the year. The increase in slaughter was balanced by the decline in carcass weights, mostly due to difficult weather conditions.

Rabobank predicts the US will close the year with large numbers of cattle on feed. However, due to the large number of heifers on feed, there could be a reduction in carcass weights in 2020. Beef production will likely maintain its high levels for 2020 and possibly 2021, however in the future there will likely be a decline in cattle outside feed yards, cattle on feed and fed beef production, according to Rabobank.

Fed cattle prices for 2020 should remain unchanged from prices over the past two years. If there is a resolution on the US-China trade agreement and more US pork goes to China, there could be an increase in all protein prices.