According to the UK’s Agriculture & Horticulture Development Board’s (AHDB) market intelligence service, the average price of chilled and frozen beef from the top three global exporters – Australia, Brazil and the USA – exceeded $6,000 per tonne in November last year. However, in April this year the average price has eased to around $5,360 per tonne, almost exactly the same as in the corresponding month a year ago.
Australia and the USA are in the strongest positions as beef exporting nations, with Australia in particular experiencing growth in volumes and value for its beef overseas, despite the overall global decline in beef prices.
According to AHDB, different factors are affecting the beef trade in each country. In Brazil, since the start of 2015, both prices and volumes of Brazilian beef exports are down on year earlier levels, indicating a reduction in demand for Brazilian beef globally. There have been several challenges for Brazil in the first part of the year, including stagnant levels of trade with Russia, intense competition in low-value markets such as the Middle East and, to date, the continuing lack of access to the US market.
In addition, difficulties in the Brazilian economy, hampering consumer demand, have driven down domestic prices. However, the announcement of Brazil gaining access to the Chinese market and talks with US officials on regaining access for fresh beef could result in a change in fortunes for the sector, the report claims.
The picture for the US is stronger, with export prices in April this year similar to the same period the year before. Favourable weather conditions have helped the US cow herd rebuild and consumer demand has remained strong, despite high retail prices. However, in recent weeks demand in its overseas markets has started to decline.
In Australia, exports are up 7% for the first four months of the year, compared to the same period in 2014. Looking at the last two years, the gains in the Australian beef export market have been even stronger, with volumes up over 27%, while prices have gone up by $300 per tonne.
AHDB said forecasts for the current year suggested there was unlikely to be an increase in beef production globally this year, which should keep prices steady. However, if prices rise, AHDB raised the possibility that consumers would be driven to switch to other proteins. For the EU, the picture is good, the report stated, because while Europe "only has a small presence on the global market, if prices of both imports and exports are higher, helped by the ongoing weak euro, this should help support the EU and subsequently the UK beef market".