Beef exporters to watch in 2016
Dec. 14, 2015
by MEAT+POULTRY Staff
Tight supplies of cattle and beef are supportive of higher prices in 2016, Rabobank said.
UTRECHT, The Netherlands – The United States ranks among beef exporters to watch in 2016 as volatility and uncertainty that characterized the second half of 2015 ease in the New Year, Rabobank said in its Beef Quarterly Q4 report.
Trend spotters will be eyeing the beef trade in Australia, Brazil, India and the US, Rabobank said, particularly the supply of cattle and beef in those countries. The US beef industry is retaining cows for breeding, and imports from Australia, New Zealand and other countries have filled supply gaps, Rabobank noted. However, supplies of cattle tightened considerably in October and November after consecutive years of record production and exports.
Also in 2016, Brazil is expected to have access to the US market for fresh beef. In July, the US Dept. of Agriculture announced new rules that opened the US market for beef to Brazil and Argentina. Currently, Brazil exports only processed (or industrialized) meat to the US. Rabobank said exports of Brazilian beef to the US may provide Brazil access to other markets.
India is another beef exporter watch. In 2014, India was the No. 1 beef exporter in the world, according to the USDA. India exported 5.3 billion lbs. of beef, widening its lead over Brazil (4.4 billion lbs.) and Australia (3.3 billion lbs.). India accounted for 23.5 percent of beef exports in 2014, compared to 20.8 percent in 2013, USDA reported.
Interestingly, water buffalo, not beef from cattle, helped land India at the top. Water buffalo is a member of the bovine family and classified as beef by the USDA. It is eaten mostly by consumers in Asia and the Middle East where consumer demand for beef is on the rise.
China will continue to play a prominent role in the global beef trade heading into 2016, Rabobank said in its report, despite its slowing economy.
“The introduction of live cattle trade for slaughter or feeding provides domestic players the opportunity to offer imports as fresh chilled beef to retail markets, claiming a premium over traditional imports of frozen meat,” said Angus Gidley-Baird, senior animal protein analyst at Rabobank. New provinces and new players are expected to join the live cattle trade in 2016, although Rabobank expects volumes to be limited by low supplies of live cattle in Australia.
Another trend to watch is the rise of sustainably produced beef. McDonald’s Corp. will begin sourcing verified sustainable beef in 2016. The fast-food chain buys only 2 percent of the world’s beef, but it is a sign of the beef industry’s move into sustainable beef production practices.
Overall, tight supplies are supportive of higher prices in 2016 as demand for beef remains firm, Rabobank said.