Rabobank sees mixed picture for global beef market

Opportunities for beef producers around the world could come next year, but that doesn't rule out risks posed by the COVID-19 crisis . The restrictions introduced this autumn in several Asian and European markets are already creating a wave of uncertainty for exporters, and in addition, the reduction of national herds in some regions may affect prices and trade.

The world is about to face a shortage of beef in the short term as cattle stocks in the United States , as well as in Australia and some other European countries, have entered a phase of decline. In most regions, cattle prices continued to rise due to continued limited supply and strong demand, according to Rabobank analysts. Brazil is an exception due to China's ban on beef imports from the South American country, which has caused domestic prices to fall since September. Limited export opportunities for Brazilian cattle have led to a sharp decline in prices over the past two and a half months.

Meanwhile, the U.S., another major player in the global market, is seeing prices rise as domestic and overseas demand for beef increased in 2021. “The US is one of the most influential beef markets in the world. - a major producer, consumer, exporter and importer, it affects all parts of the global beef market. In 2022, we expect U.S. beef production to decline but exports to remain strong,” Rabobank analysts said.

So what could go wrong for US beef exporters? “Global outbreaks of Covid-19 started to rise again at the end of October, with Europe in particular seeing a significant jump in cases. Some governments have reintroduced control measures to contain outbreaks of Covid-19, including food service restrictions. Chinese approachzero tolerance for Covid-19 is also restricting many food service channels. If the coronavirus response fails, we expect to see reduced beef options in some foodservice outlets in both regions in the coming months. Reduced investment in shipping and containers in 2019, as well as reloading and shipping cancellations, combined to push freight rates to stratospheric levels in Q4 2021. We believe that global shipping disruptions will continue in 2022 and, as a result, container shipping costs, especially refrigerated ones, will remain high,” the forecast says.