The Rabobank Global Cattle Price Index has risen by 6% since June.
Looking ahead to 2014, Rabobank forecasts continued high prices while global beef supply is expected to rise only slightly. Meanwhile China’s demand for imports is expected to increase.
However, the market has been unable to reach its full potential due to consumers’ resistance against high prices in the United States and the European Union, still two of the main beef markets.
In addition, exchange rate movements have impacted the competitive position of exporters, resulting in Brazilian and Argentine beef becoming increasingly attractive and leading to a surge in imports.
Rabobank’s outlook for the global beef market in the first half of 2014 is positive, with cattle prices remaining elevated in most regions.
The main question in many regions remains where to source sufficient beef supplies.
The report predicts that global beef production will increase only slightly and is expected to decline sharply in key markets like the US. The main demand wildcard will be consumer resistance to high beef prices and the growing availability of competing animal proteins due to the improved margin outlook as feed prices tumble.
Rabobank analyst Albert Vernooij said: «China’s importance and influence on the global beef market is set to continue to increase in 2014.
«China’s imports of both frozen and chilled beef are expected to grow further, driven by the shortage of beef in the domestic market, reflected in record high retail sales.
«We believe that the value of the Chinese markets will grow in excess of 10% annually over the next three years.»
Market round-up
The Cumberland and Dumfriesshire Farmers Mart had 21 prime cattle forward at their weekly sale on Wednesday when bullocks sold to 251.5p per kg and averaged 215.2p, while heifers peaked at 224.5p and levelled at 208p.There were 36 OTM cattle presented in the rough ring when beef cows averaged 112.4p and dairy cows levelled at 86p.
The firm also sold 773 prime lambs to a top of £88.50 per head and 198p per kg to average 171.4p.
The 789 cast sheep forward saw heavy ewes sell to £136 for a Suffolk and average £56.74, while light ewes peaked at £64 for Cheviots and levelled at £43.41. Messrs Craig Wilson Ltd sold 1111 prime lambs in Newton Stewart on Wednesday to a top of £88 and 209.5p to average 168p.
The 405 cast sheep forward saw ewes sell to £94 for Texels and £50 for Blackfaces.
United Auctions sold 163 store heifers at Stirling on Wednesday to a top of 288p and an average of 225.5p (-1p on the week), while 31 store heifers peaked at 286p and levelled at 217.9p (+0.6p).
In the rough ring 136 cows averaged 105.1p.
Source: Herald Scotland