December 29, 2014

 

World beef export prices to continue rising in 2015: Rabobank

 

 

As 2015 approaches, the world's beef export markets can expect to see rising prices in the coming year.

 

A recent quarterly report by Rabobank has attributed the trend to a combination of tight supplies and increased demand. It is these two factors that the US continues to exert a strong international influence on, according to Angus Gidley-Baird, an analyst from the Dutch banking organisation. Thus, due to such challenges, the country has also witnessed a record-level inflation of local cattle prices during the final quarter of 2014.

 

In addition, the US copes with limited cattle and beef supplies by sourcing from Mexico and Canada, both nations whose herd numbers are feeling the strain from demand. This situation is likely to remain for, at least, the early months of 2015, Gidley-Baird said.

 

Over at the Oceania region, New Zealand is also helping to meet the US demand as the country saw record farmgate prices in November 2014.

 

"A recent strengthening in the US economy and dollar will support continued imports to the US…", Gidley-Baird explains.

 

In the meantime, with less than four million beef cows in its territories, Canada may have to consider liquidating herds or rebuilding numbers in order to stabilise prices.

 

With the recent developments, Rabobank foresees further expansion for beef prices, taking into consideration the decline of Australia's export rates as well. Already affected by serious droughts this year, the country struggles to fulfill import orders as local cattle slaughtering are expected to reach eight million head in 2014.

 

Australia's supply problems may likely exacerbate with the recent trade deal struck with China. Hence, Indonesia, another important market, is concerned over getting cattle from the country as it faces rising local consumption despite high prices.  

 

Rabobank is also monitoring Russia, the world's biggest beef importer, as the country faces falling oil prices and the depreciating Russian currency. In 2015, the federation will contribute to swelling demands for beef from Brazil which is resuming its beef trade with China.

 

As for China, mild demand will keep its beef prices at bay during the first three months of 2015, Rabobank said. Prices did not breach the current high levels despite tight supplies and a continual rise in imports.

 

In yet another development, an increased segregation of EU's beef market had resulted between premium and ground beef segments.

 

As prices for prime beef stayed high, those of manufacturing beef are weakened by lacklustre demand.