Tight supply props up global beef prices

Global beef prices should stay high in the next three months, as tight supply in the USA continues and Chinese demand looks strong, according to a Rabobank report.


American beef fetched all-time record prices in the past few months as bad winter weather kept supplies tight, but consumer demand for beef should remain high if pork prices are forced up by the porcine epidemic diarrhoea virus, the bank said.


Droughts in Brazil limited production and raised cattle prices at the start of this year, while Australia’s export trade looked likely to strengthen, with slaughterings up 17% in January to 678,000 head.


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China will continue to be the main driver of beef demand, though its imports will be unlikely to grow like they did in 2013, rising 380% to 294,000t.


In Europe, the market is fairly balanced and beef prices are expected to stay firm. But the report highlighted the growing challenge of finding a route to market for bulls from European dairy herds, as dairy cow numbers have hit 23.5 million head in the run-up to milk quota abolition.


AHDB/EBLEX senior analyst Debbie Butcher said the big picture was one of continued tight supply across the EU, but perhaps less so than in 2011-12 when prices rose rapidly.


“We are forecasting Europe will produce marginally more beef this year, but nothing that is going to alter the balance of supply and demand which still points to a decline in suckler herds across the European community,” she said.


“Prices have struggled in the UK a little bit in the first quarter of this year as they have in Ireland, as we have been under a bit of a downward pressure with the weather.


“We have not had a particularly cold winter and [the cold] usually acts as a stimulus for consumer demand for beef.”