The change in per capita income is rebounding in China, Russia and other nations – at levels that put domestic household spending back at pre-recession levels.

That includes the U.S., but the American economy is “kind of laggard,” Stuart said. “It’s pretty easy to push those beef prices higher to consumers in Korea, where stock markets are up 24 percent.

“We’re no longer a U.S. business. We’re exporting roughly 10 percent of our production today, but I would tell you the price impact of that 10 percent is much larger than the 10 percent volume.”

While demand is increasing, world beef production continues to decline. Stuart said 2011 will be the fourth straight year with production dropping. So tight supplies should be expected for a few more years, resulting in more inflation in beef prices worldwide. Stuart credited technology in taking beef from $10 billion in 2001 global trade to $35 billion in 2011, along with population growth and income growth.

Food inflation will be a heavy factor not just in the U.S. but worldwide, as both fuel and feed prices also surge upward.

Competing for new markets

Stuart said the U.S. competes for all markets, but is in the game for five key export nations – Mexico, Canada, South Korea, Japan and Vietnam. Pushing for those countries, he said Australia – not Brazil – is our key competitor. U.S. beef saw its exports to Japan jump 40 percent in 2010, and 94 percent to South Korea.

The Korean market is especially aggressive on exports given the struggles with Food and Mouth Disease. Yet CattleFax predicted an 8 percent growth estimate for total exports from the U.S. – a conservative estimate given the jumps in 2010. Imports, meanwhile, are expected to jump 2 percent into the U.S. next year.

“Why not higher?” Stuart said. “We don’t know where to get the supplies.” Beef slaughter rates went down domestically in January, creating questions on how to acquire lean beef trim blends. That should lead to price jumps domestically as well, Stuart said.

With Korea buying more beef, other markets to watch include Russia, which has cut its pork and poultry quotas, and Japan, where the U.S. remains regulated. Yet the U.S. is already back to pre-2003 volume levels – without two thirds of the Japanese market it had before the mad-cow scare.

And then there’s China, a nation that opened to exports from Argentina and Canada in recent years. “I wouldn’t be surprised if we see something shake loose with China in the next year,” Stuart said, adding that Japan could also soon announce deals to expand trade. “When it happens, look out,” he said.