Consumer Trends: Global Beef Industry Report
NEW YORK (PRNewswire) — Rabobank has published a new Q3 report looking at the global beef industry, and the production imbalance resulting from the North American drought. The report also includes a comparison of Rabobank's Global Cattle Price Index vs. a year ago.
In the report, Rabobank's Food & Agribusiness Research and Advisory group says its Global Cattle Price Index dropped 7% from Q1 levels, driven mainly by generally weaker demand together with a stronger U.S. dollar. On the supply side, the world continued to be relatively short of beef, as Brazil was the only major producer to deliver significant production growth. In a year-over-year comparison, the Index began Q3 down 9% from where it began in Q3 2011.
The downward pressure on prices will ultimately be balanced against reduced supply, as cuts in North American grain-fed meat production take hold. The southern hemisphere should relieve some upward pressure on prices as beef production systems based on pasture will be better positioned to supply the world at lower prices. Supply is therefore likely to remain above last year's levels in Brazil, Australia and Argentina.
Longer term, global meat protein supplies, and especially beef, will continue to lag income and population growth in important emerging markets, raising volume risks to processors and price risks to everyone from feeder cattle buyers to consumers.
In China, the industry is flourishing; beef cattle production has expanded following considerable investment in the industry. However, Mexico continues to suffer from the impacts of the 2011 drought and looks set to suffer its fourth consecutive year of decline in domestic consumption. Looking at Q3 2012, Rabobank predicts a growth in global supply compared to 2011, driven either by herd liquidation in the U.S. and EU, or by natural herd recovery in the southern hemisphere.
Rabobank Group is a global financial services leader providing wholesale and retail banking, asset management, leasing, real estate services, and renewable energy project financing. Founded over a century ago, Rabobank is one of the largest banks in the world, with nearly $1 trillion in assets and operations in more than 40 countries, and is among the highest rated private banks by S&P and Moody's. Internationally Rabobank focuses on food and agriculture and in North America it is a premier bank to the food, beverage and agribusiness industry. Rabobank's Food & Agribusiness Research and Advisory team is comprised of more than 80 analysts around the world who provide expert analysis, insight and counsel to Rabobank clients about trends, issues and developments in all major sectors of agriculture. www.Rabobank.com