Rabobank report suggests global beef prices are likely to strengthen
The bank says market indicators from the world’s three largest beef exports is pushing prices higher. It cites firm demand as well as further tightening supply due to drought-induced herd retention in the US and some adverse weather conditions in Brazil and Australia.
“Prospects for the global beef industry remains positive in Q2, with further possible upside due to continuing pressured beef supply and scarce supply of competing proteins which will continue to impact competitive positions” said Rabobank analyst, Albert Vernooij.
“Brazilian cattle prices and exports have surged to record levels, and Australian droughts have encouraged historically high slaughter levels to meet global demand.”
Mr Vernooij highlighted the likelihood of soaring US hog prices due to the spread of diarrhoea virus PEDv. The shortage in hog slaughter could have a significant impact on total meat supplies strengthening beef demand during the spring grilling season and into summer.
Brazilian cattle prices and exports have surged to record levels, and Australian droughts have encouraged historically high slaughter levels to meet global demand. Combined with further tightening supplies in the US and scarce supplies of competing proteins, prospects for the global beef industry remain positive, Rabobank reported.
US cattle prices were $148 to $150 (€107 to €108) per hundredweight last week and are likely to be either side of $130 (€94) for summer lows, recovering to the mid to upper $140s (€100s) by the end of the year, he said.
With tight fed beef supplies, aggressive feedlot placements and a 3% decline in last year’s calf crop, there’s a high expectation for sustained and even higher prices for calves and feeder cattle this year, Rabobank is predicting.
In China, ongoing shortages in the domestic market will continue to support rising imports of frozen beef.
With EU markets more or less in equilibrium, beef prices are expected to hold firm at their current levels. Supply of cattle will remain stable.
