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The world cattle inventory showed a marginal slippage during the last half of the 1990’s; the January 1, 1999 total of 1,026,000 head, the low for the decade, compares with 1,027,000 a year earlier and the mid-1990’s high of 1,059,000 head. However, some large changes have occurred in selected areas, notably the decline in cattle numbers in the former U.S.S.R. and the increase in numbers in China. Russia’s and the Ukraine’s cattle inventory in early 1999 was estimated at only 45 million head vs. 50 million in 1998 and 71 million in 1995. In contrast, China’s January 1, 1999 inventory of a near record high 123 million head compares with 117 million a year earlier and around 100 million early in the 1990’s. India, which held about 25 percent of the world’s total cattle inventory at the start of 1999, 307 million head, appears to be slowly increasing its inventory following little expansion in the first half of the decade. Brazil had the second largest inventory in 1999 with about 143 million head vs. 145 million in 1998. The U.S. cattle inventory apparently peaked in the 1980’s at around 110 million head, then sliding to 96 million by early 1990. A moderate cyclical expansion followed that carried the inventory to 103 million head by early 1996; a cyclical downturn then followed that does not yet appear to have run its course. The January 1, 1999 inventory of 98.5 million head compares with 99.7 million a year earlier. Moreover, the mid-1999 inventory was down 1 percent from a year earlier. Cow-calf operators have lost money since 1995 and were apt to see only modest improvement in 1999, suggesting that producers are not going to start breeding more replacement heifers until at least 2000. The earliest the calf crop is likely to rise is forecast to be 2001. However, the cyclical liquidation of the beef cow inventory apparently ended in 1999 although heifer slaughter was at near record levels. The three largest cattle inventory states are generally Texas, Kansas and Nebraska. World beef use in 1999 proved relatively routine; consumption was estimated at 47.5 million metric tonnes vs. 47.8 million in 1997. European Union use in 1999 of 7.1 million tonnes was about unchanged from 1998 and compares with 6.9 million tonnes in 1996 when usage was adversely affected by the mad cow disease outbreak. Minimal latent fears of mad cow disease are still noted in some countries during 1999. China beef consumption in 1999 of a record high 4.7 million tonnes compares with 4.4 million in 1998. In the former U.S.S.R., consumption fell to 3.6 million tonnes from 3.8 million in 1998. U.S. commercial cattle slaughter in 1999 (through October) of 30.3 million head compares with 29.8 million in the like 1998 period. Dressed slaughter weights in late 1999 averaged near a record large 740 pounds. U.S. beef production in 1999 is forecast at 26.2 billion pounds vs. 25.7 billion in 1998. U.S. per capita beef consumption has shown little growth in recent years as consumers opt for less red meat in their diet; per capita use in 1999 of 68.7 pounds (retail weight) compares with 68.1 pounds in 1998 and a 2000 estimate of 65.4. However, a subtle positive shift in the consumer attitude towards beef seemed to take hold in 1999 reflecting (1) the strong U.S. economy and greater disposable income and (2) a change in the industry’s advertising that stressed beef’s high protein nutritional value; factors that could help buoy demand for beef in 2000 over initial forecasts. U.S. beef (and veal) exports in 1999 of 2.4 billion pounds compare with 2.2 billion in 1998 and forecasts of 2.3 billion in 1999. Typically, Japan has been the largest market for U.S. beef, but Mexico has been a rapidly growing market recently. U.S. beef imports in 1999 of 2.8 billion pounds compare with 2.6 billion in 1998 and 2.9 billion estimated for 2000. Australia, New Zealand and Canada are the largest beef suppliers to the U.S. In addition, live cattle are imported from Canada and Mexico. Choice steer prices, basis Nebraska, in 1999 averaged about $64.91 per cwt. vs. $61.48 in 1998. Prices are forecast between $66.00-$72.00/cwt. in 2000. On the retail level, choice beef prices in mid-1999 averaged around $2.86/lb., about 15 cents above a year earlier. Futures Markets Live cattle futures and options on futures are traded on the Chicago Mercantile Exchange (CME), the Bolsa de Mercadorias & Futures (BM&F), and the Midamerica Commodity Exchange (MidAm). Feeder cattle futures are traded on the CME and the BM&F, and feeder cattle options are traded on the CME.
Excerpted from the CRB Commodity Yearbook.