Beef prices expected to deflate in 2017
Global beef prices have been forecast to decline by 7-8% in 2017 in major producing countries, including the USA, according to independent research from global analyst Informa Agribusiness Intelligence.
Global beef prices are forecast to decline by 7-8%.
The forecast downwards development of prices comes as wholesale beef prices in 2016 peaked at about 13% below 2015, while fed cattle prices declined by about 18%, said Informa Agribusiness.
The biggest drivers in reducing prices will come, according to Informa’s Agribusiness vertical, from the USA, the world’s biggest beef importer, as total supplies of USA red meat per capita “may approach 108 pounds on retail weight basis this year, up about 1.5% on 2016”.
The report notes that declines in beef production in certain major exporting and manufacturing countries were “more than offset by increases in other countries”, as global production increased by about 1% in 2016. Further growth is reportedly expected over the next few years.
Looking to the UK, the analyst claims that “Brexit has created a dilemma for domestic beef producers, as deregulation of US beef imports could potentially lead to cheaper hormone-treated beef” at “undercutting prices”.
In addition, Informa Agribusiness is predicting increased competition for Australian and New Zealand beef in the USA this year, following the country’s approval to allow Brazil to export frozen and fresh beef for the first time since 1999.
The livestock analyst group at Informa’s Agribusiness vertical said: “In 2017, we are seeing the recovery of herd growth, following serious drought in some of the world’s biggest exporting markets. Prices throughout the US cattle and beef supply chain have declined sharply, further pressured by larger competing pork and chicken supplies.
“Further but likely more moderate growth in beef production in the years ahead, accompanied by large competing meat supplies, will lead to further deflation in US beef prices at all stages of the marketing channel.”
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