Brazilian beef to benefit as Russian import ban unlikely to hurt markets

Russian import bans are unlikely to have a large impact on world beef markets with Brazil’s industry likely to be the largest beneficiary.

That’s according to Rabobank’s Beef Quarterly Q3 which also reports the European Union market is expected to remain under pressure and at best stabilise.

It predicts that the seasonal increase in demand is unlikely to result in higher prices in the EU given the increasing competition with lower pork and poultry prices.

The report notes that the global beef supply is in a tightening phase, with most key producing and export regions already experiencing record tight supplies. Further tightening is expected throughout the remainder of 2014 and into 2015.

The impact on major exporters such as Australia and the United States will be minimal given increased impediments to trade with Russia prior to the current ban.

Rabobank notes that Brazil exports have benefited from increased demand from Russia this quarter and will start going to China during the next six months. Strong demand and tight supplies have underpinned record cattle prices.

Cattle prices in Australia have responded on the back of some decent rainfall during August, although the dry seasonal conditions remain a concern. Record slaughter continues to drive record exports, with strong international demand helping to support prices.

New Zealand beef returns have remained at record levels, and with a forecast of tight supplies and very strong US demand, industry outlook for the remainder of 2014 and into 2015 is optimistic.

Production in Argentina is expected to increase seasonally with improved weather, but exports remain at historically low levels, despite the encouraging trade.

Volatility continues to characterise the US market as cattle prices continue to trade at record levels, and consumer appetite remains firm.


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