Rabobank report gives positive new for global beef industry

By Oli Haenlein contact

- Last updated on GMT

Producers in Brazil, New Zealand and the US are currently seeing record prices
Producers in Brazil, New Zealand and the US are currently seeing record prices

Related tags: International trade, Supply and demand, Export, Beef

Rabobank’s Beef Quarterly Q3 report provided "largely positive news" with global beef supply continuing to tighten.

The report said that most key producing and export regions are already experiencing record tight supplies, with further tightening expected throughout the remainder of 2014 and into 2015. Producers in the US, Brazil and New Zealand are currently welcoming record prices.

Rabobank analyst Angus Gidley-Baird said: "There is largely positive news for the global beef industry as strong demand and tight supply are showing no signs of slowing, pushing prices – in some cases record prices – even higher."

The report also addressed the impact of the Russian import bans. Rabobank said they were unlikely to have a large impact on world beef markets, with Brazil’s industry likely to be the ban’s largest beneficiary. It added that the impact on major exporters, such as Australia and the US, will be minimal given increased impediments to trade with Russia prior to the current ban.

In the US volatility characterised the cattle market, and prices were continuing to trade at record levels. Despite volatility, Rabobank said the good news was that in spite of the unprecedented price levels, demand for both domestic and export beef continued to show no measurable evidence of slowing down.

Brazilian exports have benefited from increased Russian demand. Exports are expected to continue to grow with the Chinese market reopening after a BSE case in 2012. Strong demand and tight supplies also saw record prices here.

In Australia, Rabobank said: "Cattle prices responded on the back of some decent rainfall during August, although the dry seasonal conditions remain a concern. Record slaughter continues to drive record exports, with strong international demand helping to support prices."

Chinese imports in 2014 are expected to be lower than the record levels of 2013. However prices are currently high and demand for the remainder of this year is expected to strengthen as the peak season for meat consumption starts in Q3, with the arrival of festivals and cold weather.

In New Zealand, Rabobank said: "Beef returns have remained at record levels, and with a forecast of tight supplies and very strong US demand, the industry outlook for the remainder of 2014 and into 2015 is optimistic."

The Canadian cattle market has been enjoying a surge in cattle prices, while in Argentina production is expected to increase, but exports remain at low levels. Cattle availability remains scarce in Mexico, restraining production, while in Indonesia better supply has resulted in softening prices.

On the EU, Rabobank said: "The market is expected to remain under pressure and, at best, stabilise, with the seasonal increase in demand unlikely to result in higher prices given the increasing competition with lower pork and poultry prices."

Related topics: Meat

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