Australia has experienced record-breaking temperatures that affected large parts of northern and central Australia during the second half of March, according to Australia's Bureau of Meteorology. Drought conditions in Australian cattle regions have resulted in higher slaughter and export volumes, Rabobank reported.
Australia's beef processing has offset some of the tight global cattle and beef supplies recorded in 2014 and forecast for 2015, according to the report.
The bureau's outlook for April to June suggested wetter than normal conditions for most of the country. Nevertheless, Rabobank analysts said herd liquidation in Australia cannot continue at rates seen through 2013 and 2014. Rabobank analysts said global supplies of beef are expected to remain tight without any global beef expansion forecast in the short term.
“Global beef supply continues to remain tight in Q1 2015, although Australian exports remain high as drought continues,” said Angus Gidley-Baird, Rabobank animal protein analyst. “Continued liquidation of the cattle herd and possible improved seasons will lead to a reduction in Australia’s beef production through 2015.”
Meanwhile, prices for beef in the United States were buffeted by a high degree of volatility. Rabobank attributed market conditions to a slowing US economy coupled with lower prices for pork and poultry which have led to weak demand for beef, analysts said. Also, retail prices for beef in China have stabilized going into 2015, bucking their normal upward trend.