The Rabobank Beef Quarterly Q2 2017 overview

Photography by: John Lamb | DigitalVision | Getty Images

Market disruptions changes global beef complex trade flows through Q2, according to the Rabobank Beef Quarterly Q2 2017

The global trade has potential for material shifts as the major exporting nations around the world experience disruption, such as the political upheaval in Brazil, a new trade agreement between the US and China, and proposed bans on slaughter in India.

Rabobank -beef -quarterly -report

Rabobank Analyst Animal Protein, Blake Holgate, says that US exports are continuing to perform strongly and have reached record levels, yet the supply from Australia and New Zealand, along with potential shocks from Brazil and India, are reduced and he could see the beef market shifting back to a supply-limited market.

The meat sector in Brazil has been rocked by two political events during 1H 2017. Brazilian meat imports had temporary restrictions in March, from Brazilian federal police investigation into meat irregularities, which have now been lifted.

In May, a political scandal caught the largest beef processor which dropped Brazilian beef exports by around 10% YOY in the first five months of 2017. This may open space in the global beef market, and the recent drop in cattle prices may lead to a future reduction in production.

In June, the Indian federal government released a directive that bans the sale of cattle, including buffalo, in notified livestock markets for non-agricultural purposes.

This includes the sale of cattle for slaughter, which will have an enormous global impact with India being one of the largest global bovine exporters.

At the time of writing, no further information was available as to how many states would conform to the federal government directive, and when.

Q1 stats for New Zealand:

  • New Zealand was the largest exporter of beef into the US during Q1, 2017. This is despite the volume of New Zealand’s own beef exports to the US declining by 13 per cent compared to the first quarter of 2016.
  • Q1 exports to China were up by 28 per cent by volume and 24 per cent by value in comparison to the same period in 2016.
  • Strong global beef demand, combined with tightening domestic supply through winter, is expected to support farmgate prices at, or above, current levels for the remainder of the 2016/17 season.

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