Rabobank: Global Beef Update

Jul 04, 2014

By Amanda Brodhagen, Farms.com

Rabobank, released its second quarter beef report, examining the global beef market. The agricultural bank says the two things to take note of are the lack of rainfall in Australia and the lingering drought in some parts of Brazil and the United States. On the consumer front, Rabobank says that the record high global beef prices may result in consumers choosing pork and poultry products. But strong beef prices will be good for beef producers throughout 2014.

Highlights – Regional Outlooks:

EU:  Rabobank predicts that EU beef prices are expected to even out into the summer months. EU beef export demand is expected to remain strong.

U.S.: Rabobank explained that it reported in its Q1 report that U.S. beef prices hit an all-time record high, adding that the summer months (BBQ season) will weigh on the market. It’s anticipated that more cattle will be making their way to market soon. Feeder cattle and calf prices are expected to remain high.

Australia: Interestingly, Rabobank reports that Aussie cattle slaughter increased by 12 per cent (in the first four months of 2014). This was largely due to the dry pasture conditions. Boxed beef has reached record levels over the past five months. It’s unknown what the outlook for supplies and beef prices will look like as they will be tied to whether or not Australia’s cattle country will receive enough rainfall.

Canada: Rabobank says that high beef prices in the United States have been buying a significant amount of Canadian cattle, adding that the long Canadian winter has resulted in additional input costs (i.e. maintenance and feed). Feeder cattle exports to the U.S. are currently at 44 per cent compared to this time last year, but shipments are expected to decline later this year.

Argentina: Rabobank reports that Argentina struggles to increase its export beef sales due to its uncompetitive exchange rate. Currently, there is a 15 per cent export tax and a long process to gain export rights. Analysts expect beef production to increase seasonally, while demand will slow due to the economic/political environment.

China: China’s beef imports increased by 34 per cent, to 101,000 tons in the first four months of 2014. Beef imports to China are expected to remain high.

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