Global beef prices tipped to drop this year
The agribusiness vertical of London-based publishing and data analyst firm Informa has claimed beef prices will fall in 2017.
Increased production and recovery from drought will lead to cheaper beef prices in many countries – but not all, it said.
One of the key drivers for low beef prices will come from the US. More red meat is entering the US after a significant expansion of the country’s cattle herd that dates back to 2014, and wholesale beef prices last year were 13% lower than they were in 2017.
Drought impacting price
Informa’s agribusiness division expects cattle and beef prices to fall by up to 8% this year.
“In 2017 we are seeing the recovery of herd growth, following serious drought in some of the world’s biggest exporting markets,” said Informa’s agribusiness intelligence vertical in a statement.
“Prices throughout the US cattle and beef supply chain have declined sharply, further pressured by larger competing pork and chicken supplies.
“In 2016, wholesale beef prices, gauged by the beef cut-out, have averaged 13% below the year before, while fed cattle prices have plunged nearly 20%. Further, but likely more moderate, growth in beef production in the years ahead, accompanied by large competing meat supplies, will lead to further deflation in US beef prices at all stages of the marketing channel.”
It could be a particularly testing time for Australian beef exporters in the US, Informa analysts claimed. With the US recently reaching a deal with Brazil to import fresh and frozen beef, the extra beef from one of the world’s largest producers may see a contraction in Australia’s beef export quota.
