June 24, 2016


Global beef markets face volatility -- Rabobank report



The global beef index, as tracked by Rabobank, accelerated in the first quarter after suffering from a decline for much of 2015. However, Rabobank said in its second-quarter global beef report that it is showing signs of dropping again, with prices in the US and Canada softening as against the strengthening prices in Australia and Brazil.


"Volatility is a key theme across most markets at the moment", said Angus Gidley-Baird, senior animal protein analyst at Rabobank.


"A range of factors are creating a degree of uncertainty, including the economy and exchange rates influencing Brazil, seasonal conditions impacting Australia, the economy impacting China, and market volatility impacting the US", he explained.


In nutshells are the conditions and prospects of beef and cattle trade in the following selected beef producers:



Increased exports are seen to continue, supported by the low value of Brazil's currency, real, the high domestic prices and the slow economic conditions. Exports to China, which reopened in June 2015, totalled more than 70,000 tonnes from January to May, while exports to Saudi Arabia, another new market, reached more than 11,000 tonnes in the first five months.



China's slowing economy is affecting general beef consumption, but higher- and middle-income earners are supporting continued imports as they continue to seek quality beef products. Beef prices is expected to remain stable in the next quarter, as supply and demand are likely to be balanced.



Australian cattle supplies remain tight while prices are strong and expected to remain so through the third quarter, given the tight cattle supplies. Buoyed by recent rains, cattle prices have again risen to record levels in June.



The US market continues to be disrupted by volatility. The combination of marked week-to-week price volatility and equal volatility in the futures market has made marketing decisions difficult to impossible.



A calm in a sea of volatility, Europe is the most stable beef-production region at present, with prices strengthening slightly, supported by steady exports, particularly to Turkey, despite ample availability of beef and low prices of competitive proteins.

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