GLOBAL - Tight world beef supplies are leading to high prices across much of the key producing regions, although Europe has notable exceptions.
While the US beef industry expects another year of strong beef prices close to the heady levels of 2014, a strong sterling and Russian sanctions could spell trouble for some EU producers.
Scottish farmers have even been reassured of a food labelling investigation in light of low prices. Some suspect foreign meat is being labelled incorrectly as UK beef as people rationalise the 20 pence per kilo drop in abattoir prices on last year. read more
In England, falling beef prices showed ‘no signs of slowing down’, according to analysts at levy board EBLEX last week.
Irish values remain ‘relatively stable’ but EBLEX said supplies are tight, offering support to beef prices, along with lower imports.
Unknowns in the market were principally fiscal and relating to the behaviour of the dairy sector and consumers. read more
A further question mark hanging over the industry is what effect milk quota abolition will have on beef supply. read more
For Europe as a whole, beef prospects look poor, concerned farmers told the European Commission last month and its not just the dairy sector to blame.
Agricultural cooperative and union Copa-Cogeca said Europe lost its main buyer when Russian embargoes were imposed in August last year.
Russia is also key for Brazil, which has enjoyed strong exports as it has watched the real weaken amid the throes of economic downturn.
However, Russian buying tailed-off last year, which will be a key factor to watch in the coming months being Brazil's second market, said agri-business analyst Rabobank, summarising the situation at the end of the first quarter.
Meanwhile, the bullish US outlook stems from further supply contraction as herd rebuilding gets underway. read more
In a recent article, University of Illinois economist, Professor Chris Hurt, highlighted beef cow slaughter as being markedly lower for the second year, further pulling down beef output.
The tightness of supply is demonstrated by a 42 per cent rise in Canadian feeder cattle shipments to the US last year, which increased further in the first quarter by 14 per cent.
Currency strength is supporting this trade, which is seeing high Canadian cattle prices as the sector looks to rebuild its own beef herd.
Professor Hurt’s article, Beef industry dancing to a different drummer this year, highlighted the marked improvement in poultry, pork and dairy supplies, leaving beef as a likely winner in 2015.
However, he pointed to large price risk for cattle feeders, who are 'vulnerable' despite the lowest feed costs since 2010.
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