US beef prices holding but could face future challenges

By Michelle Perrett

- Last updated on GMT

US beef prices under pressure

Related tags: Beef

US beef prices are holding up but the global market is facing some challenges, Rabobank Beef Quarterly Q3 2018 has revealed.

Beef production is up in the US, as is production of other proteins, and US meat exports have been strong. This is despite the headwinds of trade policy uncertainties, Rabobank said.  

US prices in the first half of 2018 held up despite increased production levels but increased supplies of total proteins and potential trade fallouts are emerging concerns. Increased beef supplies and trade uncertainty look set to impact US prices in 2H 2018.

According to Rabobank there are a number of other important issues that are continuing to influence global beef markets, such as increasing North Asia imports, looming margin pressure, and African Swine Fever outbreaks.

“There is a whole laundry list of issues creating uncertainty and market volatility in the US, most of which affect global beef trade,”​ said to Angus Gidley-Baird, RaboResearch senior analyst – animal protein.

“The most important of these issues are growing US beef supplies, a plethora of protein, trade uncertainties, US drought, and a well-performing, but saturated market.”

The report revealed that Japan and South Korea beef imports were on the rise with combined imports up 9% in 2017.

The availability of beef from Australia and the US is helping to fuel this growth along with improved economies and lower global beef prices.

Australian exports to Japan and South Korea were up 11% for the YTD (June).  

According to Rabobank, the US appears to be focusing more on South Korea, with exports up 41% compared to only 6% to Japan.

Rabobank said that margin pressure is starting to show in the market and it expects to see more of this.

The impact of the outbreaks in China of African Swine Fever (ASF) could also have an impact with increased imports of pork and beef.

Rabobank said an associated lift in global pork prices could also benefit beef supply chains in other regions.

Related topics: Meat

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