Beef Quarterly Q2 2019: Changing of the guard in the beef trimmings market
With growing demand for western-style beef consumption in Asian countries, is there a changing of the guard in the world trimmings market as China, Japan and South Korea start to dominate volume trade for beef trimmings? Rabobank’s ‘Beef Quarterly Q2 2019: Changing of the Guard in the Beef Trimmings Market’ delves deeper.
According to senior animal protein analyst Angus Gidley-Baird: “The world’s largest beef importer, China, is at the centre of growth in beef trade in general, and trimmings trade specifically. Many of the cuts imported by China have been to satisfy the local cuisine. But as diets and foodservice change, this now includes a growing trend in trimmings trade.
“The growing demand for trimmings from Asian countries will create additional competition for the US but it is not expected to shift the market yet,” says Gidley-Baird. “Suppliers of trimmings into the global market should be conscious of possible changes in the trade. While steady growth is evident in the Chinese market to date, a short-term demand increase across all proteins as a result of African Swine Fever will likely cause a spike in demand for trimmings.”
European beef production
Rabobank expects 2019 beef production to decline slightly in Europe, in the range of 1.0% to 1.5% Year on Year (YOY), given higher slaughter numbers in 2H 2018 in response to tightening margins.
Beef production in Europe has essentially been flat in the first months of 2019 (Jan-Feb up 0.1% YOY), which will be seen as a carry-over impact of the reduced feed availability situation in 2H 2018.
Drought-affected member states decreased their bovine herds markedly in 2018. This is especially the case in the Netherlands (-8.4% YOY), Germany (-2.7% YOY) and France (-2.2% YOY), with these countries expected to feel the effects throughout 2019.
Consumption for 2019 is likely to follow the production trend down slightly, in the range of 1% to 2% YOY, on reduced availability.
Prices are expected to be relatively stable, although could see some upwards pressure in response to rising pork prices.
To read Rabobank’s full report, click here.