Rabobank report ponders new norm for beef prices
US is still the major driver of the global beef market, with import demand affecting prices and volumes for other countries.
However the report posed the question that, heading into 2015, if Australian exports rates decrease and herds in Mexico and Canada continue to be run down by the US, “whether a new norm has been reached for prices or whether they still have room to rise”.
Angus Gidley-Baird, analyst, Rabobank, 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.”
Taking the regions in turn, in the US, prices have continued at record levels, with supply expected to be tight in Q1 of next year.
Brazil is likely to see strong international demand for its beef sustained, due to increasing exports to Russia and reopening of the Chinese market.
In the EU, the market is increasingly separating into a premium and ground beef market, according to the report. The price of prime beef is said to be elevated next year while ground beef prices will remain under pressure to a lack of demand and increased supply from dairy-based beef.
Record slaughter levels have been seen in Australia this year, and with a dry summer expected next year, this high level is expected to be sustained.
The retail price for beef in China is expected to remain stable throughout the rest of this year and into Q1 2015, as consumption is not strong enough to push up prices beyond the historically high levels currently seen.
While in Canada, Rabobank says next year is a critical one as the country needs to decide whether to start rebuilding its industry, or further downsizing it.
