September 28, 2016
Downward pressure on global beef prices seen in H2
Cattle and beef prices in many major beef countries are expected to stay subdued or soften in the second half of 2016 due to several factors including lower beef prices in the US and a slowing Chinese economy, the Rabobank global beef report for the third quarter said.
The report said that because of its improving economic outlook and increased beef exports, Brazil is an exception, and cattle prices are expected to rise there.
US and Canadian cattle prices dropped through the first half, while other countries' prices--especially those in Australia and Brazil--increased.
The Rabobank Beef Quarterly Q3 2016 report has these briefs on the major beef regions:
US and Brazil reopen fresh beef trade
In August, the US and Brazilian governments agreed to reopen trade of beef and beef products for the first time since 2003. Brazilian exports will be limited by the tariff quota of 64,800 tonnes for "other countries"; however, exports of around 40,000 tonnes are possible in 2017.
China's slowing economy affect beef consumption
Quarter 3 is usually the peak season for animal protein consumption in China, and beef prices will be supported by the rising seasonal demand. However, in the longer term, domestic beef prices are expected to decline given exposure to a weaker economy, which is expected to slow further in 2017.
First Indian bovine imports arrive in Indonesia
A decision by the Indonesian government now permits imports of Indian bovine meat. An initial shipment of 10,000 tonnes was approved, with the government indicating potential import volumes of 80,000 tonnes in 2016. Despite this, beef prices in Indonesia remain strong.
Australian cattle prices expected to ease slightly
A combination of improved seasons, resulting in slightly more, heavier cattle being available, and the ongoing margin squeeze felt by processors and feedlots leads to the expectation that prices will ease slightly from their record highs through the remainder of 2016. However, with limitations on supply remaining critical, prices will continue to remain high.