NEW YORK--(EON: Enhanced Online News)--Rabobank has published a new report on the global beef industry, looking at issues of supply, demand and price in key markets around the world. Rabobank also says its Global Cattle Price Index has bottomed out, after two and a half years of steady declines.
“We expect further upside for the global beef market for the remainder of the year and into 2014”
In the report, the bank’s Food & Agribusiness Research team says that beef prices in most countries increased slightly in August compared with last year. Limited supply growth, mainly due to declining feed-price, induced herd retention, and continuing strong Asian import demand has supported this development.
“We expect further upside for the global beef market for the remainder of the year and into 2014,” explained Rabobank analyst Albert Vernooij. “Looking forward, the main question in many regions is likely to be where to source sufficient beef supplies, given tight availability and increasing global demand.”
Demand is expected to remain strong as a result of the global economy’s slow recovery and buoyant markets in Asia, especially China. In the coming months, Chinese imports may surge due to the Chinese New Year in February. This development could change traditional trade patterns, with Australian exporters moving product to the rapidly growing nearby markets in Asia and China, instead of the U.S. market, where supply will remain tight.
“Globally, this will support strong prices, which might be difficult to forward to the consumers,” commented Vernooij. “Nevertheless, it is positive that prices of competing proteins are also expected to remain elevated, limiting competition.”
- United States (U.S.) - The ongoing issue of the use of the medical supplement beta-agonist in the U.S. will negatively impact the U.S. beef supply and therefore global beef prices in the near future.
- Tyson’s announcement that it will not accept cattle that have been fed Zilmax is shaking up the industry.
- Canada - Canada is experiencing an unusual year in cattle shipments to the U.S., with shipments of fed cattle down 1% while shipments of feeder cattle and cull cows surged due to respectively high feed costs and the closure of a Quebec cow processor in late 2012.
- European Union (EU) – In the EU, markets are normalising after the impact of the horsemeat scandal has been incorporated in the market.
- Latin America - Brazilian prices increased due to unexpected lower supply and strong exports, resulting from the devaluation of the Brazilian real against the U.S. dollar. Despite a jump in production, Argentinean exports stabilised due to export taxes and an uncompetitive exchange rate. In Uruguay production has been relatively stable. Paraguay, however recorded a 45% increase on the previous year.
- Australia and New Zealand - Australian prices declined as a result of negative climatic conditions. In contrast, much improved climatic conditions throughout the winter and a favourable weather outlook for spring have boosted confidence across the New Zealand beef industry.
Rabobank’s report on the Q3 global beef industry is available to media upon request.
Rabobank Group is a global financial services leader providing wholesale and retail banking, leasing, real estate services, and renewable energy project financing. Founded over a century ago, Rabobank is one of the largest banks in the world, with nearly $1 trillion in assets and operations in more than 40 countries. In North America, Rabobank is a premier bank to the food, beverage and agribusiness industry. Rabobank’s Food & Agribusiness Research and Advisory team is comprised of more than 80 analysts around the world who provide expert analysis, insight and counsel to Rabobank clients about trends, issues and developments in all sectors of agriculture. www.rabobank.com/f&a
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