NEW YORK: The global beef export markets now so tightly balanced, prices will keep rising in 2015, if Australian export rates decrease and herds in Mexico and Canada continue to be run down by strong US import demand, according to Rabobank’s latest quarterly beef report here the other day.
“The US continues to be the driver in the global beef market with constrained supply and strong demand keeping prices high,” Rabobank analyst Angus Gidley-Baird said.
“A recent strengthening in the US economy and dollar will support continued imports to the US, however, we are watching a drop in the oil price and depreciation of the Russian ruble given Russia’s status as the world’s largest beef importer,” he said.
The Rabobank report said US cattle prices during the final quarter of 2014 had continued at record levels, driven by exceptionally tight supplies and strong demand.
Nothing was likely to change in the early months of 2015, which would continue to place downward pressure on the Canadian and Mexican herd numbers as cattle and beef flowed across their borders into the US.
Rabobank said Canada would have to tackle the issue of whether to continue liquidating its cattle herd in response to record prices, or start rebuilding numbers. Canada now has less than four million beef cows.
Australian cattle slaughterings were forecast to top eight million head in 2014, the highest in 35 years, as drought-hit producers offloaded stock and processors scrambled to fill import orders, particularly to the US.
Rabobank predicted Brazil’s beef industry would experience continued strong international demand in 2015 due to tight global supplies, demand from Russia and the reopening of its beef trade to China.
Retail beef prices in China were expected to remain stable in the first three months of 2015, with consumption not strong enough to push prices beyond current high levels, despite limited domestic supplies and the continued growth in imports.
Rabobank said the EU beef market was increasingly splitting into a premium and ground beef segments with prices for prime beef remaining elevated while lacklustre demand would keep manufacturing beef prices under pressure.
Keen demand from the US would continue to underpin the NZ beef industry which enjoyed record farmgate prices in November, Rabobank said.
Beef consumption in Indonesia was tipped to remain strong despite high prices. Following a record year of beef and cattle imports, concerns had emerged in Indonesia that the recent bilateral trade deal between China and Australia could reduce cattle availability from Australia.
