Despite China’s slowing economy the large consumer base will continue to provide opportunities to exporters. Rabobank said the introduction of live cattle trade for slaughter or feeding allows the local market to provide fresh chilled beef imports to consumers, a premium product compared to traditional frozen cuts.
The US market has been affected this year by uncontrollable market volatility. The ongoing herd rebuilding will keep supply tight with Rabobank expecting prices to remain firm into 2016. Importers will be supported by the continued strength of the US dollar.
Lower prices in Q4 have been a result of high volumes of beef in the US market, cheaper alternative proteins and the trade imbalance (due to the stronger US dollar).
Until the large inventories have moved through the system, US demand for beef will remain under pressure probably until the end of Q1 2016, Rabobank said.
Following very high volumes of supplies from NZ and Australia earlier this year supplies will be tighter next year with Australia on track to rebuild its herd. Rabobank said Australian slaughter numbers for October and November were down 12% compared to last year and it estimates slaughter numbers to be down by 15-20% and exports down by about 20% in 2016.
Rabobank also notes in its report the expected increase in production from India and Brazil next year up 7% and 4% respectively.
The forecast for total global production is expected to end the year at 58.443 million tonnes carcase weight down 2.2% on 2014, Rabobank said. It expects volumes in 2016 to increase slightly by 1.3% to 59.196 million tonnes carcase weight.
