Russian import bans are unlikely to have a big impact on world beef markets with Brazil’s industry likely to be the ban’s largest beneficiary. The impact on major exporters, such as Australia and the US, is expected be minimal given increased impediments to trade with Russia prior to the current ban.
“There is largely positive news for the global beef industry as strong demand and tight supply are showing no signs of slowing, pushing prices, in some cases record prices, even higher”, says Rabobank analyst Angus Gidley-Baird.
Regional highlights include:
• US -- As cattle prices continue to trade at record levels, and consumer appetites remain firm, volatility continues to characterize the US market.
• Brazil – This quarter Brazil exports have benefitted from increased demand from Russia and will start going to China during the next six months. Strong demand and tight supplies have underpinned record cattle prices.
• Australia – During August, cattle prices responded on the back of some decent rainfall, although the dry seasonal conditions remain a concern. Record exports continue to be driven by record slaughter, with strong international demand helping to support prices.
• China -- Demand for the remainder of 2014 is forecast to strengthen, although total Chinese imports in 2014 are expected to be lower than the record levels witnessed on 2013.
• New Zealand -- New Zealand beef returns remain at record levels; with a forecast of tight supplies and very strong US demand, industry outlook for the remainder of 2014 and into 2015 is optimistic.
• Canada –For the year, the Canadian cattle market has been enjoying the same surge in cattle prices as has been seen in the US and has aggressively been using all available cattle supplies.
• Argentina -- Production is expected to increase seasonally with improved weather, but exports continue to remain at historically low levels, despite the encouraging trade developments with the US and Russia.
• Mexico -- As cattle availability remains scarce, production continues to be restrained. At the end of the year, Rabobank expects beef production to increase by 0.9 percent.
• Indonesia -- Better supply has resulted in softening prices, impacting finishers’ profitability. This may lead to lot feeders importing fewer cattle in 2H 2014, despite issuing record permit numbers.
• EU -- The EU market is expected to remain under pressure and at best stabilize. The seasonal increase in demand will unlikely result in higher prices given the increasing competition with lower pork and poultry prices.